US president Barack Obama has canned $100 million (£66 million) of investment a year into hydrogen fuel cell cars.
The tax payer funded investment was set up as part of a $1.2 billion (£800 million) plan to develop hydrogen fuel cell cars by George W. Bush.
However, Obama has cancelled the project, with Energy Secretary Steven Chu saying the government preferred to target more immediate energy-saving solutions.
"The probability of deploying hydrogen fuel cell vehicles in the next 10 to 20 years is low," Energy Department spokesman Tom Welch said.
Welch cited the immense cost of developing an infrastructure of hydrogen pipelines and fueling stations for the cars. He also said there were technical obstacles to producing hydrogen and storing it in vehicles.
The Energy Department will continue to pay for research into stationary fuel cells that could be used for non-automotive purposes, Welch added.
The Bush administration spent more than $500 million (£330 million) on research into producing and distributing hydrogen so it could be used in cars powered by fuel cells.