Article posted: 1/4/2014 2:49 PM

Visitors gather around Honda NSX Concept I on display during the Taipei International Auto Show Sunday at the Taipei World Trade Center in Taipei, Taiwan.

Associated Press

TOKYO Honda Motor Co. and General Motors Co. are expected to jointly develop batteries for fuel-cell vehicles, with the aim of lowering the cost of fuel-cell cars by improving volume efficiency, according to sources.

The firms hope to take the initiative in the next-generation eco-car market, observers said.

A fuel-cell vehicle is viewed as the "ultimate eco-car" as it does not emit exhaust gases such as carbon dioxide while in operation.

Honda and GM plan to jointly produce a core part of a fuel-cell system that can create electricity through a chemical reaction between hydrogen in the fuel cell and oxygen in the air.

Unlike a gasoline-fuel vehicle, a fuel-cell car uses many special parts, and the production cost will likely be about $95,550 per unit. The automakers aim to lower the retail price of the cars by mass-producing its most costly special parts, according to observers.

Honda and GM formed a business alliance in July 2013 to codevelop auto parts for fuel-cell cars. Engineers of the firms have strengthened their cooperation in the hope of marketing a new-model car in 2020.

To expedite the development of fuel-cell cars, major Japanese, U.S. and European automakers have formed business alliances. In addition to the Honda-GM tie-up, Toyota Motor Corp. has formed an alliance with BMW AG, and Nissan Motor Co. does business with Daimler AG and Ford Motor Co.

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Sources: Honda, GM to develop eco-car batteries