Reducing or eliminating the dependency on petroleum of transportation systems is a major element of US energy research activities. Batteries are a key enabling technology for the development of clean, fuel-efficient vehicles and are key to making today's hybrid electric vehicles a success. Fuel cells are the key enabling technology for a future hydrogen economy and have the potential to revolutionize the way we power our nations, offering cleaner, more efficient alternatives to today's technology. Additionally fuel cells are significantly more energy efficient than combustion-based power generation technologies. Fuel cells are projected to have energy efficiency twice that of internal combustion engines. However before fuel cells can realize their potential, significant challenges remain. The two most important are cost and durability for both automotive and stationary applications. Recent electrocatalyst developments have shown that Pt alloy catalysts have increased activity and greater durability than Pt catalysts. The durability of conventional fluorocarbon membranes is improving, and hydrocarbon-based membranes have also shown promise of equaling the performance of fluorocarbon membranes at lower cost. Recent announcements have also provided indications that fuel cells can start from freezing conditions without significant deterioration. Hydrogen storage systems for vehicles are inadequate to meet customer driving range expectations (> 300 miles or 500 km) without intrusion into vehicle cargo or passenger space. The United States Department of Energy has established three centers of Excellence for hydrogen storage materials development. The centers are focused on complex metal hydrides that can be regenerated onboard a vehicle, chemical hydrides that require off-board reprocessing, and carbon-based storage materials. Recent developments have shown progress toward the 2010 DOE targets. In addition DOE has established an independent storage material testing center to verify storage capacity of promising materials. These developments point to a viable path to achieving the DOE/FreedomCAR cost and performance goals. The transition to hydrogen-powered fuel cell vehicles will occur over the next 10-15 years. In the interim, fossil fuel consumption will be reduced by increased penetration of battery/gasoline hybrid cars. (c) 2006 Elsevier B.V. All rights reserved.