Like clockwork, every time oil prices shoot up journalists scramble for stories about energy, and a few water-powered cars and perpetual motion machines always make it through. That's what happened with the Genepax Water-Powered Car featured on Reuters (and then a bit too uncritically on TreeHugger, but also on many other green sites like Environmental Leader, Celcias, etc).
How this Water Car Probably Works
One thing that helps fuel the conspiracy rumors surrounding water cars is that the media run these segments where they show "water cars" actually driving around, and it all seems to work, and then we never hear about them again. People figure that Big Oil (or the Illuminati, whatever) is suppressing the technology. The reality is more mundane: It is actually possible to make a car look like it runs on water without breaking the first law of thermodynamics. The way it's usually done is with metal hydrides. These react with water to produce hydrogen, which is then used to power the car. But since these hydrides will deplete with time, they need to be replaced and so they are actually the fuel, not the water. And you can be sure that more energy will go into producing them than will be taken out, making them an energy carrier, just like a battery.
Water Cars Create False Hopes and Real Apathy
There is a real danger in widely reporting these stories without debunking them, or at least being cautious to say that the "water car" is probably not doing what it claims it does until rigorous proof of the contrary.
The danger is that it creates false hopes, which then turn into real apathy. Either people believe that there's a solution to all our energy problems "coming real soon now", and so there's no need to worry and make efforts. And the people who've been around longer end up disillusioned and frustrated because they've been promised "water cars" for decades and it never comes, so they think that there's a big worldwide conspiracy against it (and somehow none of the dozens of "inventors" and "engineers" who worked on these projects were able to put the technical information on the internet).
The Bottom Line on Water Cars
As Carl Sagan used to say, extraordinary claims require extraordinary evidence. The next time you hear about a water car, remember that and don't get your hopes up too quickly.