IMAGE: SEQUEL FUEL CELL CONCEPT CAR
Denis Poroy  /  AP
GM's Sequel fuel cell concept vehicle drives through Camp Pendleton Marine Corps Base in Southern California Thursday during a promotional tour by the automaker.
updated 9/15/2006 9:01:48 AM ET 2006-09-15T13:01:48

Hydrogen fuel cell-powered vehicles could hit showrooms as early as 2011 and the technology will revitalize General Motors, GM Vice Chairman Bob Lutz said as he delivered a hydrogen concept car to be test driven by Camp Pendleton Marines over the next few months.

Calling the effort a "moon shot," Lutz said it is vital the world's largest automaker commits to the new technology, so it can win back its reputation as an innovator and design leader.

"This is to re-establish our technological credentials with the American public and the American media," Lutz said Thursday. "And it has a huge re-moralizing effect in the company as our people see how serious we are."

Up to $9 billion has been freed up as a result of General Motors' recent restructuring, Lutz said. The company now has more money to invest in hydrogen fuel cell-powered cars, which will form an important part of the auto giant's long-term economic recovery plan.

The company, which is suffering from declining U.S. market share at the hands of its Asian competitors, lost $8.6 billion in 2005 amid high healthcare, pension, labor and materials costs.

"We are going to make General Motors what it was in the '50s and '60s again," Lutz said.

Vow not to repeat hybrid mistake
Lutz acknowledged GM lost a technological edge to Toyota by failing to recognize the potential of gasoline-hybrid technology, and promised that won't happen again with hydrogen cars. He did not specify how much cash would be channeled toward production of the new cars or how many vehicles would be produced. But a company said GM has so far spent $1 billion on the technology and will spend a similar amount by 2010.

Virtually every automaker is conducting tests of hydrogen-powered vehicles, which have received support from a five-year, $1.2 billion hydrogen initiative first announced by President Bush in his 2003 State of the Union address.

German automaker BMW said Tuesday it will introduce the world's first hydrogen-powered car that comes off a factory line.

The pollution-free technology holds the potential of zero emissionsĀ  and a sustainable source of energy produced when hydrogen and oxygen are mixed. Carbon emissions are reduced to zero, provided the energy used to produce hydrogen comes from renewable sources.

Military niche, China market
Lt. Col. Jay Malik said the Marine Corps is looking at alternative fuels for environmental reasons, and because hydrogen-powered cars could simplify logistical planning on the battlefield, where the distribution of gasoline can be challenging.

Many obstacles exist before fuel-cell cars hit showrooms, including the still high cost of using hydrogen and a lack of fueling stations. California leads the nation in installing hydrogen fueling stations, Lutz said, currently with 31 around the state.

But even if energy companies fail to boost hydrogen production, Lutz said GM would still have a potentially large international market share.

"Whether or not we get a hydrogen infrastructure, it doesn't matter, because China will be the first hydrogen economy," he said.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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