2014 Chevrolet Volt gets a $5,000 price cut

General Motors is cutting the Chevrolet Volt's price by $5,000 amid price pressure from rival electrified vehicles. The sticker price on the 2014 Volt, which will arrive at dealerships this month, will be $34,995, including an $810 destination fee. That drops the effective price to $27,495, after applying the $7,500 federal tax credit for the plug-in hybrid.

GM cited price competition as a key reason for the price drop. Several other automakers have reduced prices or sweetened lease deals on EVs and plug-in hybrids this year. Nissan Leaf sales have surged this year after the automaker in January cut the EV's base price by $6,400, to $29,650, including shipping. Leaf sales more than tripled through July, to 11,703 units, edging sales of the Volt, which are up 9 percent to 11,643.

Last month, Ford dropped the price of its Focus Electric by $4,000, to $35,995 with shipping. And there are plenty of relatively cheap lease deals on EVs, including identical $199-a-month offers on the Fiat 500e and Chevrolet Spark, which both were launched this summer.

GM also said it has made "great strides" in reducing the Volt's production cost, Chevy sales chief Don Johnson said in a statement, without quantifying the savings. GM executives have said that they expect to wring $5,000 to $10,000 out of the cost of the next-generation Volt, which isn't expected until 2015.

GM said the lower price would boost interest in the Volt by aligning it more closely with comparable vehicles in research by online shoppers. "Before, if you were going to price-shop a hybrid or a plug-in, the Volt didn't even show up because of price point," GM spokeswoman Michelle Malcho said. The lower price should put the Volt in more shoppers' search results, she said.

The recent wave of price reductions and lease deals has spurred sales of EVs and plug-in hybrids, although such vehicles represent a smaller market than many automakers and analysts had expected a few years ago.U.S. sales of EVs and plug-in hybrids totaled 41,447 units this year through June, the latest figure available from research site hybridcars.com. By comparison, Dodge sold 44,949 Dart compact sedans over the same span.

Many dealers were already selling the Volt at well below sticker. GM has been offering cash rebates of $4,000 on 2013 Volts since June, and $5,000 on 2012 models.

In July, the average U.S. transaction price for the Volt was $38,578 and the average incentive per unit was $10,489, TrueCar.com says. And since mid-2012, GM has run a stair-step program that awards dealers escalating bonuses as they hit factory-set sales targets. That has provided many dealers tens of thousands of dollars in bonus cash to defray the Volt's sticker price.

The Volt runs on battery power for a range of 38 miles before a 1.4-liter gasoline-powered generator kicks on to recharge the battery, giving the car an overall range of 380 miles on a full charge and a full tank of gasoline.

Although Volt sales have fallen short of GM's original targets, the company lauds the vehicle as a success that has garnered a loyal owner base, attracted buyers from other brands and sharpened Chevy's reputation for technology. More than 70 percent of Volt buyers are new to GM, the company says. The car landed atop Consumer Reports' annual owner-satisfaction survey in 2011 and 2012.

GM said 2014 models begin shipping from its Detroit-Hamtramck assembly plant today and will arrive in showrooms within a few weeks. The only changes from the '13 model are two new colors -- ashen gray metallic and brownstone metallic -- and a leather-wrapped steering wheel.

(GM chops $5,000 off Volt price for '14 as competition grows originally appeared on Automotive News.)

By Mike Colias- Automotive News