Is engine kit compatible with bike

The engine will definitely fit in that frame, you might need a universal engine mount to fit around those thick tubes like this one---> https://www.ebay.com/itm/262602876956?hash=item3d2459e81c:g:LJkAAOSwHh1dHN54

The 48 spoke wheel will be a challenge, the rag joint set up won't work, you will need to find a sprocket adapter that will fit or get a hub with a disc mount that you can use for the sprocket.
 
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