You need to be more specific. ‘Powered’ often goes with a type of fuel or power source. ‘Propelled’ usually has to do with the motion. I replaced my gas(-powered) self-propelled lawn mower with an electric push mower. (To me, it would sound odd to say ‘gas propelled’) The mill was water-powered. It made use of the nearby river. As kids, we played with a water-propelled toy rocket.

Good question! I think in this example, both work fine. However, there is some subtle difference. "Water-powered car" can be understood as... 1) a car which uses water instead of fuel. "Water-propelled car" can be understood as... 1) a car which uses water instead of fuel 2) a car which is propelled by water pushing it -- a car which is moving and on water