Fuel cells produce electricity that can be used as a clean alternative to gasoline. “He was speaking as a hybrid rival and the second-biggest Japanese automaker, Honda Motor, began production of its newest fuel-cell car. The car, which has a top speed of 105 miles per hour, will be leased for $600 a month, the automaker said. The car maker is adding low-pollution models including fuel-cell and gasoline-electric hybrids as record-high oil prices and tougher carbon-emission rules boost demand for cars that use less fuel.

Actors Jamie Lee Curtis and Christopher Guest are also customers. Fuel cells create electricity in a chemical process that combines hydrogen and oxygen. The Civic is the only model with a hybrid option now. Specifically, producing a hybrid Civic model in Thailand may be an option because emerging markets have high import duties on cars, he said.

The battery crunch is likely to continue for the rest of the year, since new lines cannot be added to increase production until 2009, said Takeshi Uchiyamada, executive vice president of Toyota Motor, who oversees production at the leading Japanese automaker. “Hybrids are selling so well we are doing all we can to increase production,” he said. Emerging Market Hybrids Honda may produce hybrid cars in an emerging market by the middle of the next decade, Fukui also said in the interview. ”The FCX Clarity will initially be offered only in California, beginning in July, to take advantage of a network of hydrogen fueling stations being added across the state.

Honda’s FCX Clarity, a sporty-looking sedan, came off the production line Monday in Tochigi, north of Tokyo. The model’s first US customer is Ron Yerxa, who produced the Oscar-winning film Little Miss Sunshine. It’s also developing the CR-Z hybrid sports car and will add a hybrid option to the Fit compact car. The assembly line is the first at Honda to be dedicated to building fuel-cell vehicles.

Honda began production of the FCX Clarity at the center today. “We would add a hybrid system to a location where we already build a base model,” Fukui said. “It’s difficult to fathom what the industry will look like ten years down the road. “We need new lines.

The company leases 24 units to customers in the US for $500 a month. Honda plans to add three new models to help raise sales of hybrid vehicles by ninefold to 500,000 units early in the next decade from 55,400 last year, the company said on May 21. The electric motor powers the vehicle at low speeds, and the gasoline engine takes over as the car accelerates. Toyota is struggling to keep up with booming demand for hybrid vehicles because it is unable to make enough batteries that are key components of the popular “green” cars, a senior executive said Monday.

Honda trails only Toyota Motor Corp. “There’s still a lot of research that’s left to be done” on fuel-cell cars, said Yuuki Sakurai, who helps manage the equivalent of 5. 7 trillion yen ($53 billion) including Japanese auto stocks. Honda Motor CO, Japan’s second- largest automaker, may start mass production of its FCX Clarity fuel-cell car within 10 years to meet growing demand for fuel- efficient models.

It currently builds gasoline-engine Civics in Thailand. Honda plans to lease 200 FCX Clarity vehicles in the US and Japan over the next three years and has five customers for the car in the US, the company said in a statement. Ideally, water vapor is the only emission. “If we can bring costs down by a certain amount, I think we can start mass-production,” President Takeo Fukui said in an interview at its new-model center today in Tochigi prefecture, northeast of Tokyo.

Honda was the first company to lease fuel-cell vehicles to consumers in 2005 with the FCX minivan, predecessor to the Clarity. Hybrid vehicles combine a conventional gasoline engine with an electric motor. The fuel cell stack in the FCX Clarity converts hydrogen(H2) and oxygen (O2) into electricity. The motor’s battery pack is charged by the gasoline engine and by power regenerated by the brakes.

In Japan, Honda leases the FCX minivan to 11 central and local government officials with payments of 800,000 yen ($7,384) a month.