Hydrogen is hot stuff right now — or at least, that’s what many of the world’s automakers are hoping. Hyundai (KRX:005380) has been selling a hydrogen-powered version of its Tucson SUV in select U.S. markets for about a year, and several other automakers, including Honda (NYSE:HMC) and Toyota (NYSE:TM), are scrambling to catch up. There are still some major hurdles for automakers to overcome before H-cars go mainstream, but plenty of big companies are betting that hydrogen could be the next big thing for the clean-fuel automotive sector.

Hydrogen-powered vehicles work in much the same way as plug-in electric vehicles — but instead of using batteries to store electricity generated elsewhere, they produce their own electricity on demand by squeezing hydrogen through fuel cells. The hydrogen doesn’t combust; instead, energy is extracted as it combines with oxygen, leaving clean water as the only byproduct. “Once we extract hydrogen out of things, it’s a limitless source of fuel,” explains Chris Petschler, product specialist at Toyota. “We don’t burn it, so it’s completely clean.”

If the technology takes off, hydrogen vehicles would pose a significant threat to Tesla Motors’ (NASDAQ:TSLA) battery EVs — not least because hydrogen tanks can be refilled in seconds, rather than the minutes or hours it can take to recharge batteries. Perhaps it’s unsurprising, then, that Elon Musk has emerged as one of hydrogen’s most vocal critics. Using hydrogen to power cars is “incredibly dumb”, Musk smirks, because manufacturing the gas is itself fairly energy intensive, and hydrogen is a far less efficient storage medium than conventional batteries. “It’s terrible. Why would you do that? It makes no sense,” Musk says.

Musk has a point: a study published this week found that hydrogen vehicles were markedly less efficient, and markedly more expensive to run, than plug-in electric vehicles. Still, automakers are scrambling to jump on the hydrogen bandwagon. Besides Hyundai’s Tucson, eco-conscious West Coast motorists will soon be able to get behind the wheel of the hydrogen-powered Honda Clarity and Toyota Mirai sedans, both of which will retail for around $60,000. Germany’s automakers are also revving up their hydrogen R&D, with Audi (ETR:NSU) showing off a fuel-cell concept car at last month’s North American International Auto Show in Detroit, and Mercedes-Benz (ETR:DAI) and BMW (ETR:BMW) also exploring their options.

In the U.S., meanwhile, General Motors (NYSE:GM) is reportedly preparing to manufacture hydrogen fuel cells in partnership with Honda, with mass production set to begin by 2025. Ford (NYSE:F) has struck up a similar tech-sharing partnership with Nissan (TYO:7201) and Daimler in a bid to create a “common fuel cell system” intended to make hydrogen-powered autos cheaper and easier to fuel and maintain.

That sounds like a promising start for the fledgling H-car sector — but there are still big challenges to be overcome. The chief stumbling block is infrastructure: at present, there are only 18 public hydrogen filling stations in the U.S., mostly located in California. A $100 million initiative to build out more filling stations in California has been slow to deliver results, despite support from automakers; still, officials predict the state will have at least 50 public filling stations by the end of 2016. "Obviously we all have to work together, but the stations have to be available before the cars are there," says Charlie Freese, executive director of fuel cell activities for General Motors.

In the meantime, poor availability and unproven pump technologies are hampering the rollout of hydrogen vehicles. Hyundai has been offering free hydrogen refills for the past year as part of a $499-a-month lease deal on fuel cell SUVs, but online forums for Hyundai drivers are flooded with complaints about the technical difficulties dogging hydrogen filling stations, with some drivers saying they’ve been left unable to fill their tanks for months at a time.

Until automakers can iron out the wrinkles in refilling infrastructure, consumer hydrogen vehicles will struggle to win many fans. Still, fuel cell technologies are already finding traction in more specialized applications: Plug Power (NASDAQ:PLUG), a manufacturer of hydrogen fuel-cell systems for forklift trucks, expects revenues of $150 million this year, up 50 percent from 2015. The U.S. Army is currently working with GM to test an H-powered version of its Chevrolet Colorado pickup truck. And more speculatively, no-frills airline EasyJet (LON:EZJ) is planning a hydrogen fuel-cell system to power its aircraft while they taxi to and from runways, potentially saving the airline 50,000 metric tons of fuel a year.

That’s an indication that, while hydrogen boosters clearly have plenty of work to do, the technology has real potential. If automakers and their allies can successfully build out a network of hydrogen filling stations — and that remains a big if — then they might just succeed, one of these days, in wiping the smile off Elon Musk’s face.

Companies to watch

*   SimpleFuel is working on a home-refueling system for hydrogen-powered vehicles, and was this month named the only finalist for the $1 million H2 Refuel H-Prize, the winner of which will be announced later this year.

FirstElement Fuel, a retail hydrogen vendor targeting the California consumer auto market, has won $27 million in public grants and tens of millions of dollars in additional support from automakers including Toyota and Honda. It plans to build dozens of filling stations in California, and projects that it will reach profitability sometime around 2019.

*  French industrial gases provider Air Liquide (EPA:AI) has been building out a network of hydrogen filling stations in Germany and France, and also has its sights on serving the California fuel-cell automobile sector.

Ben Whitford is the US correspondent for The Ecologist. He has written for the Guardian, Newsweek, Mother Jones, Slate, and many other publications.