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Back in the mid-1990s Peugeot pioneered usable electrical power with vehicles based on the 106 and Citroën Berlingo. Neither cars made headlines, but that was before the overwhelming automotive focus on alternative powertrain vehicles that we’re now faced with.

A decade and a half later, and in more timely fashion, the company is back with the Peugeot iOn. It’s effectively a re-badged Mitsubishi i-MiEV, which means a 66bhp electric motor powered by lithium-ion batteries, mounted under the centre of the vehicle, that can be fully recharged in seven hours from a standard 13-amp socket, and giving the 3.5-metre long iOn city car a range of 93 miles.

While the firm is realistic about the potential of electric cars (estimating an EU market share of four to five per cent by 2020) it says it hopes to sell around 50,000 iOns by 2015.

The iOn offers all the essential things you look for in a city car. It’s got a spacious but compact body, which might look like a Doctor Who prop but is actually very effective at weaving through traffic thanks to its narrow proportions and good visibility. Even the interior is of an acceptable standard by comparison with its conventional rivals. The iOn is a handy 3474mm long but rather narrower than a typical European supermini. Rear-wheel drive contributes to a handy turning circle, too.

Ride quality is good, with decent body control despite soft springs that soak up all but the worst of the road’s imperfections. Even the steering has an unexpectedly swift and sharp response. The electric motor is not the punchiest powertrain, but there’s enough poke to get it up to 30mph with a certain urgency, and it doesn’t feel out of its depth in free-flowing town traffic provided you’re willing to work the motor hard and compromise your range.

The electric motor’s full torque delivery from standstill, and the lack of individual gear ratios, makes for refined and civilised progress, and in typically clogged rush-hour city traffic, its silent and progressive step-off is actually quite pleasant. Overall, it’s a huge departure from the likes of a G-Wiz, and oddly easy to like for all its challenging looks.

Equipment levels are quite comprehensive, with the iOn getting USB connectivity, a CD stereo, electric windows, remote central locking and climate control. There's plenty of safety kit too, including multiple airbags and stability control.

Peugeot has decided it will only be offering the iOn on a lease basis on a three-year, 30,000-mile contract, which includes all maintenance and servicing. But that works out as a very expensive way to not own a car with such limited abilities. Peugeot claims that those in central London can save the equivalent amount by running the iOn for those four years instead of a conventional car, but even so there are plenty of flaws in that theory.

The first is the existence of the Nissan Leaf, which may not be such a compact city car but still gets all the same electric car benefits while also being a much more grown-up and usable proposition. And you can own it for not much more than Peugeot is asking you to pay to lease the iOn. Beyond that, there is the unpredictability of electricity costs, not to mention London’s and the government’s transport policies.

It’s clear to see what Peugeot is trying to achieve with its electric car. But even so, with these costs attached to it the iOn could run on fresh air and still be un-recommendable.

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