Whether or not you drive a car, you can’t help but notice that gasoline prices have been grabbing headlines as prices have seen new lows. Only a couple of years ago, few people, if any, were predicting oil would fall or experience the kind of volatility it has over the past year. At the same time, it’s no wonder that electric vehicle (EV) sales have all but come to a halt. Pick up any recent news article on EVs, and you’re likely to read about slowing growth forecasts, delayed ship-to-market dates, and even head officers of major firms walking through the exit doors.

Now rewind a few years to a time when media was flooded with plugs promoting EVs: the innovative designs, the high customer demand, and the potential for new entrants in the marketplace to revolutionize the automobile industry. Gas prices were at historic highs prior to the 2008 financial crash, sales of large SUVs like the Chevrolet Suburban were slowing, and the cutting-edge Tesla Model S and Chevrolet Volt were grabbing all the headlines. A sense of optimism hung in the air; we were moving quickly beyond the traditional internal combustion engine and toward a world with reduced emissions and nearly free “fuel.” To mark the occasion, President Obama set an ambitious goal for the auto industry that nonetheless seemed attainable: to sell more than 1 million electric vehicles by the end of 2015.

Fast-forward to the present and witness a different world, no less beholden to oil but somewhat less indebted because of it. Today we can’t help but ask, is the steady decline of gas prices since 2014 the reason the electric vehicle market has failed to deliver even half the sales President Obama pleaded for? Just how resilient is the EV market? And for investors, is this the perfect time to get in at the bottom?

Have declining gas prices curbed the EV market?

The case for no: Other factors are to blame for the EV industry’s disappointing performance.

Over the past several decades, batteries have experienced significant advancements in power capabilities and safety. We owe the majority of our technological portability to these impressive innovations, and the electric vehicle market has also been a direct beneficiary. However, while battery prices continue to improve, the traveling range of electric vehicles and the associated charging infrastructure are still not at the level many Americans require for their primary vehicle. Additionally, the few all-electric vehicles on the market that provide the desired range, such as the Tesla Model S, come with a price tag that outstrips the budget of most car purchasers.

Essentially, even if oil prices had remained in the $80-to-$100/barrel range, most Americans still would have found the limited range, inadequate infrastructure and large upfront cost of an EV too burdensome to make the switch.

The case for yes: Low gas prices are encouraging consumers to snub electric vehicles. 

Unlike the faulty logic that concludes lower oil prices will hamper sales of solar PV panels, the notion of rock-bottom oil prices cannibalizing EV sales does have some truth to it; after all, the electric and internal combustion vehicle markets do share the same customer segment. Back in 2012, when gas prices were hovering at $4 a gallon, a hybrid vehicle typically could recoup its higher upfront costs — after calculating the buyer's’ incentives and refueling costs — in five years or so. For many prospective car buyers, this was a break-even figure with significant pull. With the decline in gas prices, however, that timeframe has extended to 10 years or more. With the financial savings now less obvious, potential EV consumers are having trouble rationalizing the environmental benefits versus the limited range and long recharging times. 

Edmunds.com has been tracking EV sales since 2011, including how the owners of these vehicles have reacted to low oil prices. You’d be right to guess that some EV owners would switch over to a gas-powered vehicle, but the real figure — about 55 percent — is surprisingly high. Furthermore, while  many EV owners are defecting to one of the popular high-mpg vehicles that have emerged over the past few years, more than one in five are switching to larger, less fuel-friendly sport utility vehicles instead. Higher gas prices may push some of these erstwhile EV owners back to the all-electric market, but the majority will not be contemplating a new car for another 7 to 10 years as they utilize their recently purchased vehicles.

If gas prices recover, will EV sales follow?

Making forward projections about an injured market is never easy. Downward pressures frequently create additional stress upon companies so that even when market pressure is relieved, the companies continues to struggle. These sorts of “additive weights” are already beginning to show themselves in the EV marketplace.

Take, for example, the release of the new Chevy Bolt. With Nissan(OTCMKTS:NSANY) selling about 20,000 affordable but low-range Leafs per year in the U.S., and Tesla (NYSE: TSLA) selling slightly more of their expensive but long-range Model S, you might think an affordable and long-range vehicle that is first to market should realize sales that exceed either of those options. Yet despite the obvious  attractiveness of the product segment, Chevy is limiting the annual global manufacturing number to 30,000, perhaps preferring to under-commit and over-deliver — all while releasing statements on its inability to keep electric vehicles in the lot. The rational path for Chevy is likely to wait for hard financial metrics that indicate a return of higher gasoline prices, and thus a demand for EVs, before committing to an overly optimistic figure. Even if gasoline prices were to spike tomorrow, Chevy and other large EV manufacturers would need time to adjust and plan accordingly.

Chevy is not the only producer in the supply chain that is waiting for reliable signals denoting a return of the EV market. Large battery suppliers, such as LG Chem Ltd (KRX:051910), are hesitant to implement manufacturing expansions that once seemed certain — and that are necessary for the industry to continue to realize reduced prices and growth. And whereas Chevy might be capable of picking up the pace of manufacturing relatively quickly when it deems the market signals sufficient, these battery manufacturing expansions tend to take several years to complete, further restricting the availability of EVs even if oil prices were to recover suddenly.

If gas prices remain low, will EV sales continue to suffer?

As I am not writing this article from my newly purchased beachfront property after having successfully predicted the fall in oil prices, I think it’s safe to say that the future supply and price of oil are anyone’s guess. The difficulty in foreseeing oil’s future is evident in the recent rapid rise and subsequent fall of oil stocks in February. Oil-producing countries Russia, Saudi Arabia, Venezuela and Qatar briefly agreed to freeze production, sending oil prices up by more than 6 percent, only to have the deal seemingly fall apart as Iran announced it would not participate in the freeze.

So oil remains a mystery, and EV manufacturers are hesitating on the sideline — yet there are signs that the EV market will soon begin to rebound.

Because EVs can now offer drivers enhancements that are out of reach for internal combustion engines — improved acceleration at low speeds, a smoother and quieter ride, the convenience of refueling or charging at home or work, decreased maintenance costs, a less polluting journey — they are finally starting to find themselves in the crosshairs of the American driver. All that is missing now is the infrastructure to provide drivers with increased mobility. The Chevy Bolt is likely just the beginning of a wave of low-cost, high-range vehicles that will entice consumers away from traditional ICEs. Tesla’s lower-cost, high-range Model 3 may still be a ways off, but I would venture to guess that once consumers are finally able to experience these capabilities firsthand, they will feel a tremendous desire for  these types of vehicles.

Oil prices will likely be a factor in EV sales for some years to come, but the thread connecting the two markets is beginning to weaken.

Companies to watch:

BYD Auto Co. Ltd.: As one of the largest Chinese automobile manufacturers, BYD sold more than 60,000 plug-in vehicles in 2015 and aims to build off this momentum. With China expected to become the world’s largest market for electric vehicles, BYD is poised to earn a hefty piece of that pie.

Tesla (NYSE: TSLA): While promises about the Model 3 sound all too similar to those about the Model X, Tesla is a brand people trust. The low-cost, high-traveling-range market has yet to be really tapped, so if the company can get the Model 3 to market quickly, it stands to profit considerably.

General Electric (NYSE: GM): After having been at the forefront of the EV market with the introduction of the Chevy Volt, GM is once again present at the start of the next wave: low-cost EVs with a high traveling range. Only time will tell if GM’s new Chevy Bolt will strike a chord with the American market, but the company is certainly making a name for itself in the EV market.  

Brandon Shenfield is an energy storage developer and an experienced financial analyst with expertise evaluating organizations and global energy trends. He holds a B.A. from the Leeds School of Business at the University of Colorado, with an emphasis in finance and international business.