General Motors and Honda are joining together to develop cars that run on hydrogen.
The two companies are leaders in fuel cell technology, which is still many years away from being viable --and affordable.
GM and Honda have had some joint projects before, although combining fuel cell car programs is the most ambitious.
The two companies together have only about 200 of the cars on the road, which generate electricity in a hydrogen fuel cell.
Michelle Krebs, an analyst with Edmunds.com, says the partnership makes a lot of sense.
"It's logical with GM and Honda because they both are leaders in fuel cells, both have had them on the roads for a while, and both have long felt this was a critical technology for the future. [And] this is very expensive work especially for one automaker to take on."
GM will place some of its engineers in Japan, and Honda will place engineers in Pontiac.
The goal is a common powertrain to use in a fleet of about 10,000 to 20,000 fuel cell cars, using the same jointly developed powertrain, in California by 2020.
The companies will also work with California groups to develop the infrastructure to fuel the cars.