Washington (Platts)--25Jan2012/328 pm EST/2028 GMT

While the Obama administration has poured billions of dollars to help develop electric vehicles, some automakers on Tuesday said fuel-cell technology is continuing to show promise and is worthy of government support.

Mike Stanton, the president of GlobalAutomakers, an association of 15 major foreign automakers including Honda, Toyota Ferrari and Kia, said infrastructure and consumer acceptance are the biggest hurdles to making fuel-cell vehicles viable and that goverment could help overcoming them.

"The technology is coming along rapidly. Our members think [there is promise in] fuel cells, but you've got to have the hydrogen infrastructure, and that is where we have to work together," Stanton said at a panel discussion on automotive policy, which was held as part of the Washington Auto Show.

"I am bullish on fuel cells," he said. "We need to develop the infrastructure, and I think we are all responsible. We need government policies, we need companies to step up, and we need consumers to think a little bit differently."

White House support for fuel-cell vehicles has fallen out of favor in recent years. In his first budget request to Congress for fiscal 2010, President Barack Obama moved to cut most funding for research into hydrogen fuel-cell vehicles, a favorite of the previous administration of President George W. Bush. Congress, however, did not support the cut.

At the time, Energy Secretary Steven Chu argued that because infrastructure for supporting electric vehicles would be much easier to put in place more quickly, limited resources should be directed toward expanding charging stations and battery technology.

Under the 2009 American Recovery and Reinvestment Act, the government pumped more that $2 billion into developing and manufacturing batteries for transportation. Obama and DOE have said the programs would help get 1 million plug-in hybrid electric vehicles on the road by 2015.

Adopting hydrogen fuel-cell-powered vehicles would require new infrastructure to produce and transport hydrogen.

Challenges of storing the highly explosive hydrogen and economically producing fuel cells to convert hydrogen to power also need to be overcome.

Automakers, however, have continued to develop fuel-cell vehicles. James Wiseman, the chief communications officer for Toyota Motor North America, said during the forum that his company expects to have a fuel-cell vehicle ready by the middle of the decade.

"I think any automaker will tell you this: that customers haven't really made up their mind yet on exactly what kind of new technology will work," Wiseman said.

"Currently there is no infrastructure for fuel cells, but we are all working on it," he said. "But that is the trick with the government. The difficult part is picking where you make your investment. We are all for it. Obviously, this infrastructure needs to be strengthened, but to actually pick where it is going is a little difficult."

But according to Alan Krupnick, the director of the RFF Center for Energy Economics and Policy, the price premium consumers will be willing to pay for fuel-cell vehicles is low. In a study for the Japanese government, the RFF found that consumers in that country would only be willing to pay the equivalent of $300 more for a hydrogen fuel cell vehicle over a standard hybrid gasoline-electric vehicle.

"Not very much," Krupnick said.

--Derek Sands@platts.com