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Weighing in at almost 2,600 kilograms, the brawny vehicle at DaimlerChrysler’s suburban Detroit skunk works seems an unlikely “car of the future.” The lines are distinctly late 20th century. Jump into the driver’s seat and it feels like your standard sport utility vehicle (SUV). But pop the hood, and it instantly becomes clear that this is no ordinary gas-guzzler: In place of a combustion engine lies a sophisticated onboard refinery-a fuel processor system of high-pressure gas lines, compressors and chemical reactors to turn methanol into hydrogen gas.

This multimillion-dollar moving laboratory-the Jeep Commander II-feeds the hydrogen to two fuel cell stacks, which silently combine hydrogen and oxygen in a chemical reaction that generates enough electricity to hurtle the SUV down the highway. The car’s operation is clean and efficient, generating only water, carbon dioxide and some spare heat. Missing are the toxic air pollutants and fine soot that spew from most vehicles’ tailpipes.

DaimlerChrysler and its partners-Canadian fuel cell developer Ballard Power Systems and rival automaker Ford Motor Co. -believe that fuel cell vehicles can deliver the power and performance that today’s drivers are used to. Commander II shows how tough a challenge this is. While the vehicle represents the state of the art in fuel cell technology, its engine takes half an hour to warm up and would cost several times more to mass-produce than a standard V6. But DaimlerChrysler is closing the gap. Its next fuel cell demo, a hatchback to be unveiled as early as this fall, will pack a fuel cell with twice the punch of Commander II’s. Not only will its fuel processor weigh half as much, but it will start up in less than a minute.

It is this type of steady and substantial improvements in fuel cell technology that have convinced many automakers and oil companies that the internal combustion engine has finally met its match. Facing tighter regulation of tailpipe emissions, several automakers are investing heavily to lead the transition. DaimlerChrysler, Ford and Ballard have spent close to $1 billion on fuel cells and plan to spend at least a billion more by 2004 to begin mass-producing vehicles. The goal is to take fuel cells out of the skunk works and into the showroom. “The great majority of our people who are working on fuel cells are working on the production program,” says Bruce Kopf, director of TH!NK Technologies, Ford’s electric car enterprise.

Ford and DaimlerChrysler’s competitors have joined the race, along with major parts suppliers. Japan’s four largest automobile makers invested more than $850 million on fuel cells over the past decade, and several are committed to commercializing the technology-possibly even before DaimlerChrysler and Ford.

These companies are excited about fuel cells because the internal combustion engine is getting harder to improve. Even the most sophisticated designs will struggle to meet the tougher emissions standards soon to be imposed in California and several states on the East Coast. And cleaning up the internal combustion engine is beginning to increase its cost. After 100 years of improvements, combustion technology is reaching its limits.

Fuel cells are also appealing because they will free electric cars from battery power, which provides the cleanest cars on the road today but also dooms them to a niche market. Battery-powered cars are zippy and responsive, and nearly silent without the rattle and roar of pistons. But these features have been overshadowed by the vehicles’ limited range. Batteries simply haven’t improved much since they were driven off the road by the internal combustion engine nearly a century ago. “The electric car’s inherent limitations essentially doom it to a very small operating range, and that’s the story today,” says historian Robert Casey, curator for transportation at the Henry Ford Museum in Dearborn, Mich. “The electric car has been the car of the future for the last hundred years.”

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