DETROIT (AP) — General Motors is knocking 13 percent 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 only 0.2 percent of the U.S. auto market. 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.
In practice, the price of the Volt has been lower since last year. The TrueCar.com auto pricing site said that in 2012 Volt discounts were nearly $10,000, or 25 percent of its sticker price at the time. The discounts were more than four times the industry’s per-vehicle average, according to TrueCar estimates. Discounts include low-interest financing, cash incentives to buyers, sales bonuses to dealers, and subsidized leases.
Mustafa Mohatarem, GM’s chief economist, said GM doesn’t know yet where the “sweet spot” for pricing and demand for the Volt.