Despite being relatively cheap to purchase (it sold for £399 + £29 for delivery), the C5 quickly became an object of popular ridicule, and was a commercial disaster with only around 12,000 being sold.
Sinclair had first started to think about electric vehicles as a teenager, and it was an idea he toyed with over the coming decades. In the early 1970s Sinclair Radionics was working on the project. Sinclair considered that the problem would be best addressed by working on the electric motor and he had Chris Curry work on the problem. However, the company's focus shifted onto calculators and no further work was done on vehicles until the late 1970s. Development work began again in 1979 and progressed erratically until, in 1983, it became apparent that new legislation would alter the market considerably and make it possible to sell a vehicle very closely resembling their development efforts.
As time went on, the Sinclair C5 gradually grew more and more expensive.
In March 1983, Sinclair sold some of his shares in Sinclair Research and raised £12 million to finance vehicle development. In May a new company, Sinclair Vehicles Ltd, was spun out of Sinclair Research and a development contract was entered into with Lotus to take the basic C5 design through to production. At around the same time, Hoover Ltd at Merthyr Tydfil entered into a contract to manufacture the C5. The motors were made by Polymotor in Italy, starting the damaging urban legend that the C5 was powered by a washing machine motor. In 1984, Sinclair Vehicles set up its head office at the University of Warwick Science Park. Despite a promotional campaign involving former formula one racing driver Stirling Moss, the immediate reaction after the launch was that the C5 was impractical in the British climate and possibly dangerous on busy roads. On 13 August 1985, Hoover announced the end of production. Fewer than 17,000 C5s were sold. Sinclair Vehicles was put into receivership on 12 October 1985.
The C5 suffered from a number of design problems including the fact that cold weather could significantly shorten battery life, exposure of the driver to weather is a big problem in the British climate and because it was low and close to the ground, doubts were raised about the C5's safety in traffic. These problems were addressed with a second battery, side screens for bad weather protection and a reflector mounted on tall poles - all available as optional extras from the launch. These problems were flippantly expressed in a contemporary cartoon showing a C5 and a juggernaut approaching each other at a blind corner, the C5 being occupied by a family of lemmings. Users of recumbent tricycles and a study by the British Department of Transport suggested the visibility fears were largely unfounded, but the weight, lack of seat-to-pedal distance adjustment, lack of gears, short pedal cranks, and that the motor overheated on long hills were serious problems.
A heavily modified C5 reached a top speed of 150 mph (241 km/h) and did 0 to 60 mph in 5 seconds taking the land speed record for an electric vehicle. The C5 also became the world's first electric stunt vehicle when it was used to drive through a 70 ft tunnel of fire. A "turbo conversion" converting the C5 to 24 volt and boosting the top speed to 27-30 mph (43-48 km/h) is available.
During the Swiss Tour de Sol in the early 1990s, several C5s were solarised and heavily modified to provide more range and speed. Plhians were made available for these conversions, which were required in order to use the C5 legally in Switzerland.
C5s have also been converted to jet engine power.