Hi bigfella
I think the basic principle is that whatever fuel you use, it has to be as efficient as possible? Even petrol is grossly inefficient in an internal combustion engine, but as nothing when compared with the amount of electricity that you would need to make any meaningful amount of hydrogen.
The electricity that the battery in your car produces doesn't come free. The battery needs to be charged by the alternator, which is driven by the engine, which in turn is fuelled by petrol. Each time the source of energy is converted i.e. from the volatile hydrocarbons in the petrol, to the rotary motion of the engine, through the gearbox to the wheels, there are losses at each stage, mainly through friction and thus waste heat. Friction is why there is no such thing as perpetual motion. The waste heat issues are currently being addressed by regenerative braking systems etc.
The very act of trying to produce hydrogen to power your car would make it less efficient than it currently is.
The amount of electrical energy that has to be put into water to produce hydrogen is, given current technology, simply too great to be of any meaningful benefit. It is grossly inefficient. Given time, and man's ingenuity, things will change, and as previous posters have indicated, one day we will all be driving hydrogen powered vehicles, but not yet awhile.
Regards, Malc