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"Battery costs are declining rapidly whereas hydrogen production remains very costly," admits Daimler chief Dieter Zetsche.

Daimler has admitted that hydrogen fuel cells have taken a back seat as battery prices continue to drop.

The German automaker has been developing FCV technology for more than a decade. The efforts led to several low-volume test fleets, including the B-Class F-Cell, and a commitment to offer the new GLC F-Cell in several markets this year.

Speaking at a Stuttgart automotive congress, however, Daimler chief Dieter Zetsche acknowledged that FCVs no longer have the same advantages that encouraged development when battery prices were extremely prohibitive for long-range cars.

"Battery costs are declining rapidly whereas hydrogen production remains very costly," he said, as quoted by Smart2.0.

Aside from the cost proposition cited by Zetsche, scant hydrogen refueling infrastructure is viewed as a significant hurdle in the US and abroad. The US Department of Energy lists just 34 stations in the entire country, most of which are centered around Los Angeles or the Bay Area.

The GLC F-Cell appears to address the lack of filling stations by integrating a battery pack with enough power to cruise for around 30 miles on a single charge, essentially relegating the fuel cell stack to a range extender that only kicks in on longer trips. Drivers no longer need to drive across town to a hydrogen station if they only use the vehicle for short commutes and top off the battery in between.

The GLC F-Cell is expected to cost around £50,000 (~$62,000) when it arrives later this year or early in 2018, though a lease program will also be available. The company has not confirmed if the US market will be included in the limited launch.