Mercedes-Benz AG hopes to decide by the year 2000 whether its experimental fuel cell technology is ripe for a volume production program, President and Chief Executive Helmut Werner says at a mid-May unveiling of the NECAR II in Berlin.

NECAR II is a Mercedes V-Class minivan converted to run on electricity generated from a fuel cell. The fuel cell uses a special foil that serves as an electrolyte and separates oxygen on one side from the hydrogen on the other. only positively charged hydrogen ions can pass through the foil to react with the oxygen. The excess electrons on the hydrogen side and the electron deficit on the oxygen side create plus and minus poles from which electricity is generated. The oxygen is pulled in from ambient air and the hydrogen is supplied from on-board fuel tanks.

Mercedes says the technology has greater potential than battery-powered electric vehicles because it produces less pollution and doesn't suffer from range limitations.

Last month's media event to showcase NECAR II was marred when the vehicle experienced mechanical problems. only a handful of the 240 journalists attending were able to take a ride in the van, which stalled out several times during short test loops, then was pulled off the road by Mercedes engineers. Company officials say a problem with a sensor controlling the experimental vehicle's 2-speed transmission, not the fuel cell itself, was to blame.

Still, the foiled demonstration program serves as a reminder how far this technology has to go before it is on the market.

Mercedes officials readily admit it will be 2006 or later before fuel cell-powered passenger vehicles-commercial vehicles could come earlier-enter production. Fuel cell size and weight have to come down dramatically, because Mercedes believes that to be viable in the market fuel cells will have to be able to fit in A-Class size cars. And costs also will have to decline significantly. "We'll have to be able to offer a vehicle that's attractive to customers--that fits into the internal combustion engine world," says Mr. Werner. "It can't have a premium price."

Still, the NECAR II represents a dramatic and faster-than-expected leap forward in fuel-cell technology. When Mercedes produced the NECAR I two years ago, the fuel cell filled the entire cargo space of the MB 180-based van, leaving room for only the driver and front-seat passenger. The NECAR II houses the fuel cell entirely under the van's rear seats, leaving room for a driver and six passengers. The weight-power ratio has been cut from 21 kg/kW to 6 kg/ Kw. And the new carbon-fiberreinforced plastic hydrogen storage tanks--mounted on the roof of the van--now can hold 50% more hydrogen and are 20% lighter than the glass-fiber reinforced aluminum tanks used in the NECAR I.

Mercedes claims NECAR II has a top speed of 68 mph and a driving range of 155 miles (250 kg) on full tanks. And because it is powered by hydrogen, its sole emission is water vapor.

In addition to technology development, there are many infrastructure issues that have to be solved before a fuel-cell vehicle is practical. one problem is fuel availability and distribution. Hydrogen is volatile, and although Mercedes believes it can be distributed and used safely, the automaker is aiming for a longer-term solution of using methanol as the base fuel. Hydrogen would be produced from the methanol, which could be stored in standard fuel tanks, by an on-board "reformer." An additional by-product--carbon dioxide--would result, but Mercedes says emissions levels would be "considerably less" than an internal combustion engine.

Mercedes, working with Vancouver-based Ballard Power Systems, believes it has the jump on fuel-cell technology worldwide, but executives say it will take a serious focus to stay ahead of the pack. Work is under way at other auto companies in Europe, the U.S. and Japan, and Ballard says it is supplying its technology to General Motors Corp. and Honda Motor Co. Ltd., among others.