Intercoolers increase the efficiency of the induction system by reducing induction air heat created by the supercharger or turbocharger and promoting more thorough combustion. This removes the heat of compression (i.e., the temperature rise) that occurs in any gas when its pressure is raised or its unit mass per unit volume (density) is increased.
A decrease in intake air charge temperature sustains use of a more dense intake charge into the engine, as a result of forced induction. The lowering of the intake charge air temperature also eliminates the danger of pre-detonation (knock) of the fuel/air charge prior to timed spark ignition. This preserves the benefits of more fuel/air burn per engine cycle, increasing the output of the engine.
Intercoolers also eliminate the need for using the wasteful method of lowering intake charge temperature by the injection of excess fuel into the cylinders' air induction chambers, to cool the intake air charge, prior to its flowing into the cylinders. This wasteful practice (when intercoolers are not used) nearly eliminated the gain in engine efficiency from forced induction, but was necessitated by the greater need to prevent at all costs the engine damage that pre-detonation engine knocking causes