The law is correct in its entirety, but in most cases this is interpreted or looked at very poorly and the scientific community grossly neglects the obvious. This law is applicable to closed systems only. Before evaluating an energy system the first aspect to check is whether it is open or closed. For any closed looped system, this law is perfectly applicable and any such claims are bogus.

For the past few decades, Quantum Physics has come a long way exactly predicting the laws of nature on micro scale (atoms, and molecules). Quantum Electro Dynamics (QED) thus far is the flagship component of all Quantum theory, which is widely accepted in all leading universities around the globe and lead to the advancement of laser, electronics, plasma research etc. According to QED, or general quantum mechanics, the uncertainty at micro worlds dominates. If we take water, H2O is an average phenomena, and there is no certain locations or bond angles as to measure. A high voltage can easily "stress" covalent apparent bonding of H2O; thus in theory it is possible to stress the polarized H2O to a level which equalizes the bonding strength with only voltage (no current or amperage).

This is an area where people have already researched in the history, and also being heavily researched at this point in time. The bond breakage can acutely happen, thus the dielectric characteristic of water (distilled) suddenly diminishes (catastrophic dielectric failure) which is a point where large amount of H2 and O2 exits. This is not exactly Faraday electrolysis and the resultant gas quantities can well exceed 300+ times more than Faraday’s expectations. An exotic observation here is the gas is produced between the two electrodes (commonly stainless steel plates) and not as expected at the electrodes.

About the recent water car from Genepax, Japan, we had the exclusive opportunity to do some poking with the invention through our fellow researcher in Tokyo. Their cell is up to the claims, but their demonstration (car running in streets by Reuters) was not so genuine. It was running on the batteries, thus the energy unit was just loaded doing nothing significant. However, the water fuel cell truly produced 300W of power consuming water. They use ruthenium, platinum and some corral sands (probably to make the porosity of the membrane) in Membrane Electrode Assembly (MEA). Researchers are currently studying their two filled patents, which describes the catalytic disassociation of water.

Again, the same question - how this is possible within the framework of first law of thermodynamics? QED theorizes, and now practically proven that when we take out all heat out of a sealed vacuum, approaching absolute zero (fractions of Kelvin above zero in practice), considerable energy still prevails. This is called "Zero Point Energy". Whatever we do, we cannot make electrons to stay still as predicted by Heisenberg uncertainty principle. Electron’s positions can only predicted as a probability.

In theory, if electrons are not in stationary places, it is moving, and if electrons are moving there should be a kinetic energy plus an electric field. This indeed is the zero point energy.

It is rather unscientific nowadays to reject any energy system taking thermodynamics and conservation of energy as the shielding. There are observations right before our eyes which can certainly describe with QED or general quantum theory.

Or, perhaps, now with more advanced and well established String Theory, the ambient is not what we see, but quite weird. Only if we have an open mind to accept, it will begin to appear.