Daimler AG (DAI.XE), Ford Motor Co. (F) and Nissan Motor Co. Ltd. (7201.TO, NSANY) have agreed to jointly develop a common fuel cell electric vehicle system in a bid to develop what they say will the world's first affordable, mass-market fuel cell electric vehicle as early as 2017.

"We are convinced that fuel cell vehicles will play a central role for zero-emission mobility in the future," said Thomas Weber, a member of Daimler's management board. "With this cooperation we will make this technology available for many customers around the globe."

Powered by electricity generated from hydrogen and oxygen, fuel cell electric vehicles emit only water while driving. The electricity for these vehicles is produced on board in the fuel cell stack where it is generated following an electro-chemical reaction between hydrogen--stored in a purpose-designed, high-pressure tank in the car--and oxygen from the air. The only by-products are water vapor and heat.

The three car companies--who characterized the deal as a push to accelerate the commercialization of fuel cell electric vehicle technology while reducing investment costs associated with the engineering of the technology--said they will invest equally in the project, but didn't disclose an investment amount.

They plan to develop a common fuel cell stack and fuel cell system that can be used by each company in the launch of "highly differentiated, separately branded fuel cell electric vehicle", which produce no carbon dioxide emissions while driving.

Engineering work on the fuel cell stack and the fuel cell system will be done jointly by the companies at several locations around the world. Daimler, Ford and Nissan are also studying the joint development of other fuel cell electric vehicle components.

Ford's shares closed Friday at $13.59. Nissan's shares closed at $9.55 on Friday, while those of Daimler closed at $59. All three companies shares were inactive in recent premarket trading.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

Copyright (c) 2013 Dow Jones & Company, Inc.