Most of the automobile manufacturers are investing heavily in fuel cell research and many already have running models. These run on hydrogen.
For example, check out the
Cadillac Provoq.
There are 2 big problems.
1) How to produce hydrogen efficiently and without causing environmental issues.
2) How to create the needed infrastructure to distribute the hydrogen.
Catch22 - It's hard to create hydrogen filling stations with no cars that need hydrogen. It's hard to sell hydrogen cars with no way to fuel them.
Fuel cell technology and nanotechnology are two areas that appear to hold a lot of promise for the not so distant future.