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They couldn't produce the hydrogen nearly as cheaply as they said. The photovoltaics of the day couldn't handle the deterioration over time to any economic sense. The material for the fuel storage was heavy and took up alot of volume (if you look, the trunk in that car is full of storage tanks). And hydrogen has a low energy volumetric density with respect to gasoline so your have range problems as well. Plus there was the whole "chicken/egg" problem of making hydrogen fuel stations.
Which isn't to say that 30 years later the economics aren't changing. Although I suspect that today we'd prefer fuel cells instead of burning the hydrogen. (Internal combustion engines are inherently low efficiency engines). We also don't particularly want the nitrogen/oxygen gases that combustion with air produces. There are even better places to get the hydrogen than water as well (well, at least "easier").
What we could do 30 years ago that we are only now beginning to do is the hybrid. The hybrid was around 30 years ago. But back then we were focused on extremely light weight cars to get 50 mpg (like the Honda Civic was about 25 years ago). Hybrids were comparatively heavy. If we had moved towards hybrids, all the techonologies that help hybrids would have gotten vastly more development since the technology could have quickly moved into production. Better batteries, regenerative breaking technologies, constant rpm engines, continuously variable transmissions, etc. etc. etc.
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