Big hurdles remain, but the industry appears inexorably headed toward the production of fuel cell-powered vehicles early next century.

Major issues that still need to be resolved include how to pare down extraordinarily high vehicle costs and build an infrastructure to supply fuel. It's also unclear whether fuel cell cars will appeal to consumers — particularly in the U.S., where gasoline costs remain low and clean air concerns are more regional than national in nature.

But the technology appeared to take a big step toward “volume” production last week, when DaimlerChrysler AG unveiled its fuel cell-powered NECAR 4. With the rollout of the fourth-generation experimental electric vehicle, DC seems more committed to fuel cell technology than ever.

“Today, we declare the race to demonstrate the technical viability of fuel cell vehicles over,” says DC co-Chairman Juergen Schrempp. “Now we begin the race to make them affordable.

“We will invest more than $1.4 billion in (bringing a fuel cell car to market),” he adds. “We hope that by 2004 we will be able to deliver the first fuel cell cars to our customers.”

Other automakers also were making noise about fuel cells last week. General Motors Corp., which showed off a hydrogen fuel cell-powered version of its new Opel Zafira multipurpose vehicle at the Paris auto show last fall, said two of the vehicle's developers were awarded Partnership for a New Generation of Vehicles medals in a ceremony at the White House last week. GM, too, says it is aiming for a marketable fuel cell vehicle by 2004.

Ford Motor Co., through its partnership with DC and fuel cell supplier Ballard Power Systems, also is working with similar powertrains in its P2000 experimental car.

What makes DC's NECAR 4 (New Electric Car) stand apart from prior generations is that it looks virtually customer-ready. Although it weighs and costs too much and lacks a practical means of refueling, by all other measures the NECAR 4 could very well be in the hands of consumers today.

Like its immediate predecessor, the NECAR 4 is based on the tiny Mercedes A-Class. But unlike the NECAR 3, whose comparatively bulky fuel cell system drew power from methanol, the NECAR 4 feeds directly off liquid hydrogen. Not only does this eliminate the need for the on-board reforming of methanol to extract its hydrogen component, it also frees up more interior space.

The NECAR 3 had to sacrifice its rear seats and trunk to carry the larger and additional components. Most of NECAR 4's fuel cell-dedicated equipment is squeezed within the approximately 6-in. space afforded by the A-Class' double floor, with only a minimal spillover into the trunk. The result is a true 5-passenger car that drives much like any conventional vehicle.

A test drive of the NECAR 4 confirms that the technology works, in practice as well as in theory. As with most electric vehicles, it accelerates swiftly from a stop, reaching 30 mph in little over 6 seconds. And it can reach a top speed of 90 mph, making it highway feasible.

Perhaps the most attractive element of the NECAR 4 is its 280-mile driving range, considerably better than — in most cases well more than double — battery-powered electric cars.

Another attractive feature of the NECAR 4's operation is its refueling process. Whereas most batteries take hours to fully recharge, the NECAR 4 is fueled in much the same way as a conventional car.

DC board member Klaus-Dieter Voerhinger points out the three major challenges to continued fuel cell vehicle development are to reduce weight, increase affordability and develop an infrastructure. While the NECAR 4 has taken 30% of the weight out of the package compared to the NECAR 3, the cost of a fuel cell stack remains 10 times too expensive. Infrastructure, on the other hand, depends entirely on what fuel or fuels generally are decided upon, whether gasoline, methanol or hydrogen. Although hydrogen was chosen as the fuel for NECAR 4, DC executives see the real future in methanol.

“We still see merit in gasoline (in fuel cells), but our main thrust is in methanol,” says Bernard I. Robertson, DC senior vice president of engineering technologies. Mr. Voerhinger agrees. He says the automaker has found support “in discussions with the oil industry to provide an infrastructure for methanol. For us,” he adds, “methanol is the best.”

Currently, there are only about 38 methanol refueling sites in California and another 15 mostly fleet-operated outlets elsewhere in the U.S., according to the American Methanol Institute. Still, the organization says cost to add methanol pumping capability to the nation's fuel stations would be relatively low. Converting an existing gasoline underground storage tank to methanol costs less than $20,000, and the tab to add new methanol capacity to an existing station is about $62,000, the AMI claims.

“The global methanol industry is ready, willing and able to serve a worldwide market for fuel cell vehicles,” says AMI Chief Executive John Lynn. “Our estimates show that for about a $3 billion investment, methanol pumps could be added to one out of every three corner ‘energy’ stations in the country.”

Supply shouldn't be a problem, the AMI adds. There currently are 18 methanol production plants in the U.S. with capacity for 2.6 billion gallons per year and 90 plants worldwide with capacity for 11 billion gallons. The organization estimates there could be some 2 million methanol-powered fuel cell cars on U.S. roads by 2010, requiring availability of about 900 million gallons of methanol annually. That's less than 8% of world capacity. And even if the population hits 35 million vehicles by 2020 and annual fuel requirements jump to 15 billion gallons — 135% of global capacity, the industry could respond quickly, the AMI says. “It only takes two to two-and-a-half years to build a methanol plant,” says a spokesman.

In the meantime, DC has begun working on its next fuel cell concept, what it currently is calling NECAR X. In it, DC will revisit methanol reforming like the NECAR 3, but preserve the interior spaciousness achieved with the NECAR 4. The automaker also promises to resolve issues inherent with the use of methanol such as poor cold starting performance and the problem of freezing.