The invention relates to a low-cost high-performance rare-earth AB5 type 
hydrogen storage 
alloy and a preparation method thereof. The 
hydrogen storage 
alloy is shown as the following general formula: Ml(Ni1-x-y-wCoxMnyAlzMw)mNn, wherein x, y, z, w, m and n refer to 
molar ratios, and x is more than 0 and less than or equal to 0.1, y is more than 0 and less than or equal to 0.2, z is more than 0 and less than or equal to 0.2, w is more than or equal to 0 and less than or equal to 0.06, m is more than or equal to 4.8 and less than or equal to 5.5 and n is more than 0 and less than or equal to 0.1; Ml consists of La and at least one of the element group consisting of Ce, Pr, Nd, Sm, Gd, Dy, Mg, Ti and Zr, wherein La accounts for 30 to 90 weight percent and the La accounts for 10 to 30 weight percent of the 
alloy correspondingly; M is at least one of Cu, Fe, Si, Ge, Sn, Cr, Zn, B, V, W, Mo, Ta and Nb; and N is Ca and / or Y. The 
hydrogen storage alloy consists of a 
single phase or an Al-Mn-Ni-Co phase which does not exceed 2 weight percent and / or an RE-N-Ni precipitated phase. The alloy is prepared by adopting single-double roller rapid 
quenching or common 
casting technology, keeping the temperature at 1173-1273K for 4 to 12 hours for annealing treatment, and performing water, oil or 
gas quenching treatment. The alloy has high capacity and long service life; meanwhile, high-price Co in the alloy has low content, so the alloy has the 
advantage of low cost; and the recycling performance is good.