It can, it's pretty much standard stuff for mode-7, really. Was gonna say that the light effect in night levels wasn't going to work, but then I realized that abusing the windows and blending it could be possible to do something similar (Mario Kart does that to show the ranks, after all). The only thing I'd worry about are the big sprites (buildings mainly). Don't underestimate the ASIC (and before you point out it only covers half the screen, also let me tell you that the game is rendering to both scroll planes to get more colors, so it's literally drawing two half-screens at the same time). Worth nothing this is the same engine powering BC Racers.
Actually, this doesn't work on the original. Diagonals just turn, negating any deceleration; which I had a good play with.
