Swatch Group Ltd., the Swiss company best known for its oversize watches, is testing a hydrogen fuel-cell powered car in Switzerland and hopes to bring it to market within the next three to four years, a spokeswoman for the company said Wednesday.

The car is being built in a joint venture between Swatch's subsidiary Belenos Clean Power AG and the Paul Scherrer Institute. The two companies began development of the fuel-cell technology in May 2008, and a fuel-cell powered car is now in testing and development.

A prototype of the car, known as the ELV2, has a 40kW electric motor and a 12kWh lithium-ion battery powered by a 25kW hydrogen fuel-cell, Swatch CEO and Chairman Nick Hayek said in an interview with NZZ am Sonntag.

What we don't know is whether it would be cost-efficient to build, Hayek said.

No price has been set but the goal is to give a competitive price, a spokeswoman for the watchmaker said. Swatch was also responsible for the development of the Smart compact car manufactured and sold by Daimler AG. The Smart car starts at $12,490 in the U.S., although the technology used in a fuel-cell car probably would increase the price.

The Paul Scherrer Institute, which is a research group in Switzerland that focuses on the natural and engineering sciences, has been  working with Swatch to develop the car.

The institute said in a statment the venture aims to produce a zero-emission drive train for a lightweight four-seater car.

The idea behind this is to develop a fuel-cell for powering a car that is as economical and durable as a comparable internal-combustion engine, it said, adding, Belenos is working on a system that enable hydrogen to be obtained from solar energy using photovoltaic cells.

There's no confirmation on the state of the solar-powered hydrogen converter. The unit, if produced, would split water into hydrogen and oxygen. The hydrogen could then be used to power the fuel-cell car. The only by-products of fuel cells are water, electricity and heat.

IOL Motoring has a picture of what they claim is the prototype of Swatch's fuel-cell car. If this is actually the car, the prospective vehicle bears a striking resemblance to the Smart Fortwo.