General Motors is knocking 13 per cent off the sticker price of the Chevrolet Volt electric car as it tries to keep pace with rivals in the market for plug-in vehicles.
The automaker said Tuesday that the 2014 Volt will start at $34,995, including shipping — $5,000 less than the current model. The new model is scheduled to reach showrooms late this summer.
Sales of electric vehicles are rising, but they're still a small piece of the overall industry. Automakers have been forced to cut prices or offer discounted leases in order to move the vehicles off dealer lots. Nissan dropped the price of its electric Leaf and sales soared, something GM had to notice.
"Chevrolet is undoubtedly aware of this shift in Leaf pricing, and its resulting sales spike. We all know what you're supposed to do when you can't beat 'em," said Karl Brauer, senior analyst at Kelley Blue Book.
Electric vehicles once were billed as the answer to high gas prices and dependence on foreign oil. But U.S. oil production is rising and gasoline supplies are abundant. Pump prices have remained relatively stable the past three years, while gas-powered cars have gotten more efficient, making consumers reluctant to give them up.
There's also the worry that an electric car could run out of juice on longer trips.
Kelley Blue Book said in a report Tuesday that the average price for battery-powered and plug-in hybrid vehicles has dropped 10 per cent so far this year, to $36,922 from $41,102.
That's before a $7,500 federal tax credit. GM says that including the credit, the cost of the Volt could drop as low as $27,495.
Chevrolet has sold 11,643 Volts through July, up 9.2 per cent from the same period a year ago. But Leaf sales more than tripled, to 11,703, after Nissan cut some features and lowered the base price to $29,650 including shipping.
The Volt can go about 38 miles on a battery charge, then a small electric motor kicks in to power the car until it can be recharged. GM said it has cut costs as it has gained experience making electric vehicles and parts, all while adding features and increasing the car's battery range.
The sluggish sales of electric cars have dampened high expectations. President Barack Obama has said he wants to put 1 million plug-in electric vehicles on the road by 2015, but with less than two years left, the nation is far short of that goal.
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