Will the oil price slump hit sales of cleaner cars?

Will the oil price slump hit sales of cleaner cars?

Electric cars
ShutterstockMatej Kastelic
The auto market appears to remain committed to low-carbon vehicles, despite analysts' predictions of a boost in gas guzzler sales.

This article originally appeared at Business Green.

The Detroit Motor Show is taking place this week against a backdrop of tumbling oil prices, but automakers have shown no inclination to throttle back on the promotion of their fast-expanding fleet of zero emission electric vehicles (EVs).

Honda, Tesla and GM are all showcasing electric and fuel cell models this week, while in the UK Volkswagen put on sale a plug-in hybrid version of its popular Golf, confirming a sticker price of £28,035.

Significantly, the Golf GTE will be widely sold through all of VW's franchises, unlike its other electric cars, which have only been made available through specialist retailers.

The gas/electric-powered car can travel 31 miles in pure electric mode with a top speed of 81 miles an hour, which rise to 138 mph with the gas engine engaged. The GTE's 8.8 kWh lithium-ion battery can be charged in under four hours from a domestic mains outlet or around two and half hours from a domestic wallbox, VW said.

Golf GTE

Volkswagen recently put on sale the Golf GTE,  a plug-in hybrid version of its popular Golf.

With CO2 emissions estimated at 39 grams per kilometer, the car is also expected to be exempt from London's congestion charge and vehicle excise duty.

Meanwhile, Honda showcased its latest fuel cell car in Detroit, which is due to be launched in Japan in March 2016. The Honda FCV Concept boasts a driving range of around 300 miles and a refuelling time of just three minutes, marking another step forward for the nascent hydrogen vehicle industry.

A host of other low-carbon cars are set to hit the market in 2015, including Toyota's fuel cell Mirai, the Chevy Bolt , and Tesla's Model X, an electric SUV. The greater consumer choice has been tipped to see sales of electric cars continue their impressive growth over 2014 — in the UK, sales quadrupled over the past year .

But with the oil price plummeting, some industry analysts are claiming consumers will be less convinced by the benefits of going electric. Analyst Glass's is among those predicting gas-guzzling cars could make a return if fuel prices stay low.

"The desirability of this type of car went into significant decline around five years ago as a direct result of increasing fuel prices allied with falling consumer confidence and greater government austerity," said Rupert Pontin, Glass's head of valuations, adding that it could take three years for oil prices to return to the $105-per-barrel peak seen in the middle of last year. "While no one could call petrol and diesel prices exactly cheap, they are certainly falling to a level where some consumers won't place fuel economy as high on their list of priorities as we have seen in recent years. Bigger engined cars are suddenly more viable."

But others in the industry remain optimistic that the oil price collapse will not put a dent in the fast-expanding market for zero emission vehicles. Tesla founder and green entrepreneur Elon Musk drove the cheer-leading this week, telling the Detroit autoshow that Tesla would be making "millions" of cars by 2025.

Electric car expert Robert Llewellyn was also less than convinced by the analysis, writing on his blog that the oil price slump is unlikely to impact the electric car market. "As anyone with two brain cells is aware, people don't buy electric cars just because petrol is expensive or cheap," he wrote. "There are hundreds of reasons, the main one being that the technology is more interesting, impressive, reliable and it is possible to make your own fuel.

"That's disruptive, that's upsetting to the entrenched and well-defended monopolies that govern us... via the governments they pay for. So I would suggest that electric car sales will not be affected by the drop in the price of oil."