The hybrid engine system, which switches between gasoline and electric, is already being put into commercial operation while fuel-cell autos are seen as the ultimate solution to reduce dependence on gasoline.

Domestic universities and automakers are gearing up to ride a global trend to develop alternative-fuel vehicles. Made-in-China concept cars are already on the way.

"We have an ambition to make 100 fuel-cell cars by 2008 and even boost the figure to 1,000 by 2010," said Sun Zechang, technology director of Shanghai FCV Powertrain Co, a firm affiliated to Tongji University, on fuel-cell car development.

Fuel-cell, another type of electric auto, is seen as an ideal method to develop a clean auto sector as the only emission is water. The power in a fuel-cell comes from the reaction of hydrogen and oxygen. It also needs hydrogen charging similar to gas filling.

Shanghai FCV has made three prototypes — Start III fuel-cell cars, which can run at 122 kilometers per hour for 230 kilometers after one hydrogen charge. The car can accelerate to 100 km per hour from zero in 20 seconds.

Several fuel-cell cars will run in Shanghai in 2010 as a showcase to allow the public to experience the technology.

With similar ambitions, Tsinghua University developed two fuel-cell buses which can drive at 70 km per hour for 200 kilometers. The hydrogen-powered buses will debut on Beijing's roads next October.

Although the prospects seem rosy, there are also challenges. Besides, technology difficulties, soaring research and development costs may be the biggest challenge to accelerate the development of fuel-cell vehicles.

Tongji University started R&D on fuel-cell cars in 2000 under China's five-year plan to develop alternative-fuel autos. More than 200 million yuan (US$24.7 million) has been poured into the project so far. More funds are needed to push the project a step further.

Hydrogen recharging stations have to be built for the fuel-cell autos and it needs several millions of yuan to build one.

The transport of hydrogen is another problem since special attention is needed to ensure the gas does not hurt people's health.

Toyota Motor Corp, meanwhile, is ready to make and sell its popular hybrid Prius sedans in China by the end of the year after selling 425,000 of them since 1997.

The Japanese automaker will produce Prius in Changchun in Jilin Province — the first time Toyota will make it outside Japan — after getting a warm reception in the United States, Japan and Europe.

Although the model's domestic price is not disclosed, the Prius carries a sticker price of US$20,875 in the United States, about US$3,000 to US$5,000 more expensive than gasoline-engine autos.

"A higher price tag may be the main challenge for Toyota to make a success of selling its Prius in China, especially when automakers are cutting prices to boost sales," Hu Song, a Haitong Securities Co analyst, said.

"What counts most is government support such as a tax cut on buying hybrid (vehicles) or giving some allowances," he said.

Hu is not optimistic of booming sales for the car at this stage, a view partly echoed by Zhong Xiaogang, a 32-year-old Shanghai worker who has been driving for one year.
"The selling price is a key factor on buying a hybrid while fuel price is another concern."