NEW YORK (CNNMoney.com) -- BMW has announced that it will produce a limited number of hydrogen-powered luxury performance cars in 2007.

The BMW Hydrogen 7, based on the company's high-end 7-series luxury sedan, will be powered by a 260-horsepower 12-cylinder internal combustion engine capable of running on either premium-grade gasoline or hydrogen, the company said. The car will be able to switch fuels automatically when the liquid hydrogen tank runs dry, BMW said, with no change in performance. The driver can also switch fuel sources by pressing a button.

The dual-mode system provides the car with a cruising range of more than 400 miles, according to BMW. The car can run for 125 miles on just the hydrogen tank alone and another 325 miles on gasoline. The long cruising range and the ability to burn gasoline are important because hydrogen fueling stations are still difficult to find.

The cars will be driven by "selected users" in the United States and other countries, BMW said. A total of 100 will be built with about 25 going to the U.S., said BMW spokesman Andreas Klugescheid.

"We will identify people we want to see in those cars because we think they would be ideal ambassors for" hydrogen fuel, said Klugescheid.

The selected drivers could be charged a monthly fee for the use of the car, he said. They would also need to live in an area with a reasonable number of available hydrogen fueling stations.

The Hydrogen 7 will be based on the BMW 760Li, BMW's largest and most expensive sedan. The 12-cylinder BMW 760Li has a base sticker price of $118,900. No price has been announced for the Hydrogen 7 and the company has not announced plans to produce the car in any larger numbers..

Two years ago, Mazda, a Japanese car company controlled by Ford, announced that it was road-testing a version of its RX-8 sports car that, like the Hydrogen 7, could run on either gasoline or hydrogen. That car also used two separate fuel tanks.

Several car companies, including DaimlerChrysler (Charts), General Motors (Charts) and Honda, are experimenting with hydrogen fuel cell vehicles. Those vehicles use hydrogen in a chemical process that produces electricity for power.

Whether used in fuel cell vehicles or in internal combustion engines, as in the Hydrogen 7, hydrogen-powered vehicles emit only water vapor as exhaust.

Hydrogen is the simplest and most abundant element in the universe, but it does not naturally exist in a pure form. Some critics have expressed concerns that the processes used to separate hydrogen from other substances may, themselves, create significant pollution. Also, hydrogen is commonly derived from non-renewable sources such as natural gas.

Clinton to get custom hybrid SUV

Little cars, big space...see photos of 7 that fill the bill

Get professional driving lessons, win a car

Feedback