General Motors (NYSE: GM ) will reduce the price for its plug-in hybrid Chevy Volt by $5,000, the company announced today. The sticker price for the 2014 Volt will drop almost 13%, from $39,995 for the 2013 model, to $34,995.
And the Volt's price could be reduced even further by consumers' taking advantage of federal tax credits that range as high as $7,500, depending on the buyer's tax situation. Those tax credits could take the price of the Volt down to $27,495, according to the company. Chevrolet had sold 11,643 Volts through July, up 9.2% from the same period a year ago.
"We have made great strides in reducing costs as we gain experience with electric vehicles and their components," said Don Johnson, U.S. vice president for Chevrolet sales and service.
Sales of electric vehicles are rising, but they're still only 0.2% 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. Kelley Blue Book said in a report Tuesday that the average price for battery-powered and plug-in hybrid vehicles has dropped 10% so far this year, to $36,922 from $41,102.
Although GM calls the Volt a plug-in vehicle, it also has a gasoline engine to increase the car's range from an EPA estimated 38 miles using just the power stored in its batteries, to 380 total miles after the range-extending gas engine kicks in.
The Volt gets 98 MPGe when using the electric motor only, according to GM, while the gas engine gets 35 MPG in the city and 40 MPG on the highway.
-- Material from The Associated Press was used in this report.