BMW will release a hydrogen-powered X5 in the early 2020s

The SUV will be part of a pilot program.

BMW believes in the internal combustion engine's future, but it's nonetheless making significant investments in alternative fuels. The company announced will put a handful of hydrogen-powered X5s in the hands of real-world customers in the early 2020s in preparation for a wider roll out in the middle of the decade.

Klaus Frölich, the head of BMW's research and development department, confirmed the X5's arrival in an interview with Forbes. He added the model will be part of a pilot program, and it will use new technology, so it will be considerably more expensive than a comparable gasoline-powered or hybrid model. It's too early to tell whether the SUV will be sold, leased, or available through a long-term rental plan.

The X5 will benefit from technology developed jointly by BMW and Toyota. While both companies have a tremendous amount of experience in making hydrogen-powered cars, Frölich argued the technology remains too expensive to mass-produce.

"It doesn't make sense to scale [a hydrogen-powered X5] when the stack is 80,000 euros. It makes sense to scale when it's 10,000 euros," he explained.

He didn't address the elephant in the room: the refueling infrastructure. It's tiny at best all around the world, and companies are reluctant to invest in it, but the German government has ambitious plans to expand it in the coming years.

BMW and Toyota aren't alone in their quest to make hydrogen-powered cars a reality. Mercedes-Benz already dabbles in the technology, Honda teamed up with General Motors to develop it, while Audi and Hyundai pledged to share drivetrain parts. Hyundai even floated the idea of a high-performance car powered by a hydrogen fuel cell. All of these companies see hydrogen-powered cars a viable long-term solution to the problem of range anxiety often associated with electric cars.