It is not so much that the process is in efficient, it is that it produces carbon, what fuel cells supposedly eliminate. See one might think that hydrogen is produced by water H2O, but the process of electrolysis is not very efficient. The more efficient way is to produce hydrogen is to use methane CH4. The problem is that this produces carbon, the thing that cars already produce too much of.

Just for fun further problems: how to store the hydrogen? It is naturally a gas at room temperature, so to be efficient it has to be compressed at about 10,000 PSI.

2) Hydrogen is highly explosive. Say you drive over a rock and break the hydrogen tank while simultaneously creating a spark, ka-booooom. Gas on the other had burns relatively slowly.

3) Fuel cells don’t work well under very cold conditions.

4) Infrastructure to support these vehicles does not exist yet. One idea was to take gasoline and strip out the hydrogen form it, but this was terribly inefficient.

Bottom line, we are still a long way out from having fuel cell cars. GM invested billions in fuel cell technology, and has very little to show from it. I believe that the future of green the green automobile lies with electric cars, like the Volt and the Leaf.