Commemorating the second world war

FILLING the tank is one of the more painful experiences of modern motoring as numbers whirr on the pump at wallet-draining speed. The falling price of oil has brought some relief to drivers. It is widely assumed that tumbling oil prices will put a dent in the sales of electric cars, as internal combustion engines become increasingly cheap to run. Even carmakers such as BMW have admitted that they fear their battery-powered vehicles will take a hit. In fact, the relative cost of refuelling is hardly a consideration now. And in years to come improving the performance of electric cars will be far more important for their popularity than the cost of a barrel of crude. Why?

Electric vehicles are unlikely to fall too far out of favour in the short term. That’s partly because they are hardly in favour. Of the 1 billion vehicles on the world’s roads fewer than 1m are powered by electricity alone. Battery power can cut the bills considerably. An electric car with a range of 90 miles, typical for most new models, can cost as little as $2 to recharge. But buyers are not looking for cheap motoring. Electric cars are pricey. Compared to diesel and petrol models with super-frugal new internal combustion engines, even after the generous subsidies that many governments provide, the upfront costs are prohibitive.

Electric cars attract some buyers not because they are cheap but because they are expensive. They serve as a badge for committed greens to demonstrate to the world that they care about the environment no matter what the cost. The absence of tailpipe emissions of carbon dioxide and other noxious pollutants may give drivers a green glow. Tesla owners, who can shell out over $100,000 for one of the luxury electric saloons, are not looking for budget motoring but status as techies. Moreover cheap refuelling is only one advantage. Hefty government subsidies, low maintenance costs and the ability to recharge at home add to the appeal. Exemption from London’s congestion charge, free parking in some urban areas or the ability to zip around congested Chinese megacities that heavily restrict petrol-powered cars are all selling points.

Why established carmakers, and not tech firms, will build the cars of the future

Over time the cost of the vehicles will be far more influential than the oil price. The battery in a Nissan Leaf, the world’s bestselling electric car, accounts for half the selling price. Only a breakthrough in battery chemistry or another technology, such a regenerative braking, can bring costs down significantly and make electric cars a realistic mass-market prospect. And the lower the battery cost, the less sensitive the payback period is to fuel prices. Electric motoring has many drawbacks. Overcoming a lack of infrastructure and establishing a second-hand market (batteries degrade over time reducing range and are pricey to replace) are still to be resolved. Electric cars may not catch on but low fuel prices will not be the reason.

Dig Deeper:
Why Chinese firms are so keen on America's battery powered cars January 2014
Why electric cars aren't always greener December 2014
Why the oil price is falling December 2014