Those who envision a world full of automobiles powered by fuel cells running on hydrogen seem not to have noticed that this can't happen unless the hoped-for technology can out-perform competing technologies, especially battery-powered cars.  Both systems start with electricity and both end with electricity driving on-board electric motors.  But the fuel cell vehicle--left column in the following comparison--is inherently less efficient and, for that reason alone, likely to be more costly:

The first three steps in the hydrogen route embody well-established technology, but the last step, fuel cell technology to convert hydrogen to electricity aboard a vehicle, needs much refinement. In comparison, battery technology also needs refinement, but no preliminary conversion or handling steps increase the cost or reduce the energy efficiency of this route.

In order to make the two routes as comparable as possible, one could postulate that hydrolysis, compression, and hydrogen storage are done in small scale units at each local vehicle filling station, which would eliminate the need for a new, separate hydrogen distribution system. Centralized facilities would make sense to the extent that increased efficiencies would support the costs of a hydrogen distribution system.

In order to believe fuel cell vehicles will win the competition with battery vehicles one needs to believe either that fuel cell technology (now at an infant stage) will catch up to and pass battery technology (now at a juvenile stage) and be enough more efficient that it can bear the costs and inefficiencies of the up-stream facilities and still be cost competitive, or that fuel cells will be given legal advantages to overcome their economic disadvantages.

The observation that the first entrant can sometimes dominate a market even with inferior technology and higher costs could work to favor battery vehicles but is not likely to work in favor of fuel cell vehicles if they should be first. The electricity distribution system for battery vehicles already exists and could be exploited by later entrants with battery-powered vehicles even if a parallel hydrogen generation/distribution were already in place. In contrast, it is hard to see who would invest in a separate hydrogen distribution system when there is no assurance that fuel cells will be competitive with batteries.

Another reason to expect that batteries will win the race is that there are many, many uses for batteries and many industries and companies are working on making batteries smaller, lighter, longer-lived, more efficient, safer, and faster to charge. (See, e.g., a report of ExxonMobile work on litium ion batteries and other postings on the blog linked here.)  In contrast, solving the comparable problems of fuel cells is not of much interest to companies that are not vehicle manufacturers.

Hydrogen can also be produced by "reforming" light hydrocarbons (routinely done in petroleum refineries) or by reacting powdered coal with steam (used to make "town gas" in the 19^th Century). If we have light hydrocarbons, why would we not just run them in a standard internal combustion engine in a hybrid auto, instead of reforming to hydrogen to feed a fuel cell? Either way, we have CO₂ to dispose of and, I strongly suspect, more wasted energy. The town gas reaction is throw-back technology with the biggest possible CO₂ burden. So, assuming a generic source of electricity instead of one of these sources of hydrogen seems like the best case scenario for the fuel cell vehicle.

I say hydrogen fuel cell vehicle development is a dead end.  What do you think?  Did I get my facts or analysis wrong?  Are there technological reasons to believe the hydrogen route can displace the battery route?  Are auto companies doing research on hydrogen vehicles only to reduce the political pressure to commercialize hybrids and plug-in cars sooner?  Why are environmental groups like NRDC promoting hydrogen vehicles?