General Motors Company (NYSE:GM) and Honda Motor Co Ltd (NYSE:HMC) will, over the next seven years, work together to develop hydrogen-powered vehicles, which emit only water vapor, the auto majors announced on Tuesday, as the industry continues to explore options to cut emissions while keeping manufacturing costs under control.

The announcement marks a revival of interest within the auto industry to produce hydrogen fuel-cell vehicles, after interest waned in the technology recently, in favor of electric cars. Current technology allows hydrogen fuel-cell vehicles to drive up to 400 miles and to refuel in three minutes, the automakers said, compared to around eight hours that electric battery-powered vehicles take to recharge.

“Among all zero CO2 emission technologies, fuel cell electric vehicles have a definitive advantage with range and refueling time that is as good as conventional gasoline cars,” Takanobu Ito, president and CEO of Honda, said in the company statement, adding that both companies aimed to “create an advanced system that will be both more capable and more affordable.”

According to the agreement between the American and Japanese auto giants, which does not include manufacturing, GM and Honda will share previous research and future discoveries at joint research facilities in Michigan and Japan to deliver the vehicle by 2020, Agence France-Presse reported. 

And, both companies will step up lobbying for more hydrogen refueling stations, which will be crucial to break into the mass market, the companies said, in a joint statement.

The global auto industry is bracing for stricter international standards on emissions and fuel economy limits over the next decade, including in the U.S., where automakers will be required to produce cars that run 54.5 miles on a single gallon of gas by 2025, according to Reuters.

“When you look ahead to 2025 when you have 54 mile-per-gallon fuel economy standards, something needs to happen, and it's not going to be (battery) electric vehicles,” Dennis Virag, president of the Ann Arbor, Michigan-based Automotive Consulting Group, told Reuters.

Fuel-cell vehicles, which use a different propulsion system compared to conventional vehicles, are two to three times more fuel-efficient and are touted as a viable option to achieve energy security, as hydrogen can be produced domestically from greener resources such as solar energy, wind and biomass.

However, one of the main challenges in developing hydrogen fuel-cell vehicles is the high cost of components. The use of platinum alone, which is required to start the chemical reaction within the fuel cell, adds thousands of dollars to the price of each vehicle.

Also, the volume of hydrogen fuel required to power a vehicle over a particular distance is much higher than gasoline, which means hydrogen-powered automobiles require a bigger gas tank than most conventional vehicles.

In 2007, GM introduced more than 100 hydrogen-powered automobiles,which now have accumulated nearly 3 million miles of real-world driving, according to the statement.

In 2008, Honda introduced the FCX Clarity, a hydrogen fuel-cell car, which was leased to customers to collect data concerning real-world use of fuel-cell vehicles. The Japanese automaker is now planning to launch an upgraded version of FCX Clarity in the U.S. and Japan, in 2015.