Honda wants to cut the price of its fuel-cell vehicles to between 3 million yen ($27,500) and 4 million yen, a similar price as that of its Accord sedan, Yozo Kami, who leads the fuel cell project, said at a press conference in Tokyo today. Honda wouldn't give an exact price of the FCX fuel-cell vehicles now.

``The fuel-cell technology may never be used,'' if no one is able to cut production costs by 2020, Kami said. It may take another 10 years from now to cut the cost of such vehicles to 10 million yen, he added.

Tighter air-pollution laws and higher fuel prices have prompted Honda, Toyota Motor Corp. and other automakers to spend billions of dollars developing fuel-cell vehicles and gasoline- electric cars. Honda, the first automaker to release a hydrogen fuel-cell vehicle in 2002, leases the FCX for 800,000 yen a month in Japan for a one-year period.

``Honda's technology is praiseworthy,'' said Atsushi Kawai, an analyst at Mizuho Investors Securities Ltd. in Tokyo, who rates Honda shares ``neutral.'' ``But it will be a long time before fuel cell cars can compete.''

Fuel cells, used for decades in spacecraft, produce only steam as a byproduct of generating electricity. High costs and a lack of hydrogen fueling stations have limited the technology to small test programs to date.

More demand for the vehicles may come from the U.S., because the country is setting up the hydrogen fueling stations, Kami said. Honda's 19 customers for the FCX include the states of California and New York in the U.S. and the Hokkaido prefecture government in northern Japan.

The Honda FCX can run 430 kilometers (267 miles) on one filling of its hydrogen tank. Toyota's FCHV can travel 330 kilometers on a tank of pressurized hydrogen, at speeds of as fast as 155 kilometers per hour. The Toyota-city based carmaker will offer 30-month leases to central and local government officials with payments of about 1.05 million yen a month starting July 1.

Honda shares fell 0.6 percent to 5,410 yen at the 3 p.m. close on the Tokyo Stock Exchange.