Gordon Brown says he wants two or three cities to trial electric vehicles before the end of next year. After many false dawns, are we finally about to see the era of the battery car?

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If so, it's about time – electric vehicles promise real reductions in carbon emissions, inner-city pollution and urban noise levels. About a quarter of the UK's CO2 comes from vehicles. Even if a battery in an electric car is charged using electricity from the grid, there are major savings in emissions. An electric vehicle has only a handful of moving parts, compared to many hundreds in an ordinary car. So reliability is high, maintenance costs are tiny and vehicle life may be almost indefinite.

Electric vehicles have been around for more than a century. Why should the world suddenly start to get interested? The most important reason is that battery prices are finally coming down. According to Valence Technology, the world leader in the latest generation of lithium phosphate batteries, we can expect battery packs with a range of 120 miles to cost less than £6,000 within a few years. Although this will add substantially to the price of cars, the owner will pay only about £2.50 to 'fill up' her vehicle, less than a fifth of the petrol equivalent. For people with daily commutes, electric cars will make good financial sense over the life of the vehicle – provided we can get banks to start making auto loans again.

The perception that electric cars are slow and ugly is also changing. The beautiful UK-designed Tesla has an acceleration that matches the fastest petrol cars. Other countries have already begun to jump on the battery-powered bandwagon. Portugal is establishing a network of street recharging points. Ireland wants a tenth of its vehicles to run on electricity by 2020. The major car manufacturers, led by Renault, are powering into battery vehicles as fast as they can. The UK is not alone in seeing that the future of the automobile is almost certainly electric.

So what do we need to do to get rapid development of the industry? We need funds to construct many thousands of charging points in the street and investment in the companies and universities working on improving battery technologies (Imperial College researchers are world leaders). Most importantly, we need support for the businesses already building battery cars and vans. Smith Electric Vehicles in Newcastle is the biggest manufacturer of electric vans and light trucks in the world and an optimist could see this company become one of our most important exporters within two decades.

This article was originally published in the Guardian on Wednesday 8 April 2009.