General Motors is slashing the price of its Chevrolet Volt electric car by $5000 (R49 300) to help boost demand for the plug-in hybrid in a segment still struggling to gain a foothold in the US auto market.
The price cut for the 2014 model will lower the price to $34 995 (R345 000), including delivery fees but before federal tax credits - it could fall as low as $27,495 (R291 000) with the tax credit.
Vice-president for for Chevrolet sales Don Johnson said: “We have made great strides in reducing costs as we gain experience with electric vehicles and their components.
GM did not quantify the cost savings for the 2014 model, but has said the next version of the Volt, due in 2015, will cost $7000-$10 000 (R69 000-R99 000) less.
The 2014 models will begin arriving in US dealerships later in August.
Kelley Blue Book senior analyst Alec Gutierrez said: “Chevrolet has quickly discovered that when price savings at the pump and ultimately value are your key selling points, a $40 000 (R395 000) cost of entry makes for a difficult hurdle to overcome for most budget conscious consumers.”
He added that he expected GM to roll out aggressively priced lease deals on the new Volt.
The 2014 Volt will offer consumers the equivalent fuel consumption of 2.4 litres pwer 100km on electric power and 5.9 litres per 100km when powered by its petrol engine. The car can drive almost 65km on its electric charge, with 600km of total driving range.
PUSHING THE TECHNOLOGY
Several automakers have slashed prices on their electric cars to help overcome consumer qualms about high costs and fears about driving range, and are pushing to develop the technology in hopes the vehicles could become a bigger seller as fuel-efficiency requirements rise globally.
Nissan cut the price of its Leaf EV by more than $6000 (R59 000) in January, in May Honda slashed the lease price of its battery-powered Jazz by one-third and in July Ford reduced the price of its 2014 electric Focus by 10 percent.
By the end of July, sales of electric vehicles in the United States had more than doubled from 2012 to almost 49 000 vehicles, but still made up only 0.54 percent of the overall market. During the same period, Volt sales increased nine percent to 11 643.
CHEAPER SPARK
GM had already cut the price of the 2013 model Volt by $5000 (R49 300) to help boost demand. In late May it launched the Chevy Spark electric vehicle at a lower-than-expected starting price of $27495 (R291 000) and is offering discounted leases on both cars.
The Volt price cut is another step in GM's effort to seize the mantle of “greenest automaker in the world” from Toyota, which makes the popular Prius, in both hybrid and plug-in versions.
GM is aiming to build up to 500 000 sales a year by 2017 of vehicles with some form of electric power, including the Volt, Spark EV and those with its eAssist system that boosts fuel-efficiency in petrol-powered cars.
GM will begin building the Cadillac ELR plug-in electric coupé late in 2013. - Reuters