In fact, they did see the writing, BMW for example developed the Hydrogen 7 [0], Mercedes Benz produced Fuel Cell cars[1]. What they didn't expect, was, that simple Lithium based batteries would take over. Obviously they wanted to retain the range of the combustion engine cars
[0] https://en.wikipedia.org/wiki/BMW_Hydrogen_7 [1] https://en.wikipedia.org/wiki/Mercedes-Benz_F-Cell