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Toyota says that recharging time makes its hydrogen-powered Mirai a better bet than battery electric cars. But a new Audi SUV calls that claim into question. Source: Toyota.

Toyota's (NYSE: TM) Mirai is an electric sedan powered by a hydrogen fuel cell, a device that chemically extracts the energy from hydrogen gas to produce electricity. 

It's a clean technology -- the only "exhaust" is water vapor -- but producing hydrogen affordably isn't exactly a clean process right now. That has led many green-car enthusiasts to disparage Toyota's effort.

Toyota says that fuel cells are superior to the batteries used in electric cars like Tesla Motors'(NASDAQ: TSLA) Model S. As Toyota sees it, electric-car batteries take too long to recharge -- and that will keep battery-electric cars from ever breaking out into the mass market.

Toyota scientists say that fast recharging isn't realistic. But this past week, Audi showed off an electric SUV with Tesla-beating range that can be fully recharged in less than an hour. It'll be in production in about two years, the company says.

Did Audi just send Toyota back to the drawing board?

VW is making a huge bet on battery-electric technology
Audi's corporate parent Volkswagen Group (NASDAQOTH: VLKAY) wants to be the world's largest automaker. It's Toyota's biggest rival, and it's determined to outdo the Japanese giant when it comes to electric cars.

Toyota leads the world in battery-electric hybrids. But it has shied away from a commitment to pure battery-electric cars. That's because of its concerns about recharging time, it says. But VW executives decided to tackle the problem head-on -- and it looks like they've made significant progress.

Audi Etron Quattro Concept On Highway

Audi's "e-tron quattro concept" is a preview of a new battery-electric SUV that Audi plans to put into production in early 2018. It has over 300 miles of range and can be recharged in less than an hour. Source: Audi.

Audi is calling this SUV the "e-tron quattro concept." But the company is making it clear that this is a preview of a vehicle that Audi intends to put into production, it says, early in 2018. That production vehicle will likely be called the Audi Q6. If its capabilities are anything close to what Audi is claiming for this concept, it'll be a very impressive product. Audi says that the e-tron quattro concept will have a range of over 500 kilometers, or about 311 miles, when fully charged. It has three electric motors that give it all-wheel drive and the ability to accelerate from zero to 100 kilometers per hour (about 62 mph) in 4.6 seconds, quite fast for an SUV.

The hottest versions of Tesla's Model X SUV might beat the Audi on a drag strip. But Audi has Tesla beat when it comes time to recharge: With VW's new "Combined Charging System," Audi says that its SUV's 95 kWh battery pack can be fully recharged in 50 minutes.

Will Toyota be left behind?
Audi executives take Tesla very seriously, but they seem convinced that they can outdo the Silicon Valley upstart. That's possible: Tesla has built a great car, but Audi can devote resources to things like interior design and suspension refinement that Tesla can't currently match. That's also true of Audi's corporate sibling Porsche, which showed off a battery-electric sports sedan of its own this past week.

No matter, it's clear that Tesla will be able to compete with Audi (and Porsche) -- and vice versa. Volkswagen's commitment to battery-electric vehicles is starting to make batteries look more like a viable mass-market option.

But what about Toyota? The new Audi's recharging time might be fast enough to render Toyota's objections to battery-electrics moot. At the very least, it's a big step in that direction, and it suggests that more improvements are possible -- even likely.

The Toyota Mirai is an interesting product. But it's not a compelling one, and the case for it is suddenly starting to look thin. Did Toyota make a big bet on the wrong horse? Stay tuned.

John Rosevear has no position in any stocks mentioned. The Motley Fool owns and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.