Honda will initially offer its 2017 Clarity Fuel Cell sedan with a retail lease in California as it tests the market for hydrogen-powered vehicles and eventually offer the car for sale, the automaker has announced.

Honda expects to sell the Clarity for about $60,000 and make it available with a lease payment under $500. Honda announced its pricing and sales plan for the vehicle at the Washington D.C. Auto Show on Jan. 21.

The Clarity will arrive by the end of the year as Honda's next generation of fuel cell vehicle that advanced on the technology introduced with the outgoing FCX Clarity. The Clarity, which seats five, increases power density over its predecessor by 60% with a fuel cell stack that's 33% more compact. The vehicle will offer a driving range of more than 300 miles, which is comparable to Toyota's Mirai fuel cell sedan that arrived in October.

Honda is also rolling out a new generation of hybrids, including the 2017 Accord Hybrid that goes on sale in the spring and a new plug-in hybrid based on the Clarity Fuel Cell platform slated for launch by 2018. The new plug-in hybrid should offer at least40 miles of electric driving range.

Honda has been actively working to advance hydrogen vehicles and expand the fueling network. In 2014, Honda committed $13.8 million to FirstElement Fuel to accellerate the building of hydrogen fueling stations in California.