General Motors Company [NYSE:GM] recently announced that it was planning to build hybrid-electric cars in China by 2008, with drivetrains co-developed with DaimlerChrysler and BMW. However, the company is still fully backing hydrogen powered fuel cell vehicles and has announced today that it could produce them for the same cost of their gasoline counterparts once they reach a production volume of 1 million units.

According to GM’s vice president of R&D, Larry Burns, "lack of scale is the primary reason for the high costs of fuel cell vehicles." By producing the clean vehicles in larger numbers, GM hopes that they'll be comparable to gasoline motors in terms of performance, durability and cost roughly $50 per kilowatt (of output) by 2010.

The biggest stumbling block is setting up the hydrogen fuel infrastructure. GM is looking for support from various governments and from the international community to prevent redundant investments. Currently, GM only views Honda and its FCX fuel cell concept as a worthy rival, but it’s only a matter of time until the other manufacturers enter the segment.


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