GM drops 2014 Chevrolet Volt price by $5,000

After a wave of price cuts by rival automakers, General Motors has cut the base price of the 2014 Chevrolet Volt by $5,000.

The $34,995 price, including destination charges, is actually just $1,000 less than the incentives GM had been offering on new 2013 Volts since June. The 2013 Volt was $35,995, but GM has now made its price equal to the 2014 model for all-cash buyers who don't finance through GM's Ally Financial.

Prices for new electric vehicles have been dropping nearly every month this year to boost the segment's low volumes. Electric-car sales comprise less than 1 percent of the total U.S. market. Automakers continue to struggle with high prices, limited range and technology that quickly becomes outdated.

In May, the Chevrolet Spark EV became the lowest-priced 4-door EV on the market, but the $27,495 subcompact is on sale only in California and Oregon. Nissan, Honda and Fiat have been cutting prices on their EVs to within dollars of a comparable gas-powered car.

• Electric cars lose 30 percent of value after one year, NADA says
• 2014 Chevy Spark EV now lowest-priced 4-door electric car
• GM reportedly losing $49,000 on every Chevy Volt it sells

The 2013 Nissan Leaf S starts at $29,650, a $6,400 price reduction over the base model 2012 Leaf. In July, Ford cut the Focus Electric by $4,000 to $35,995. In May, Honda dropped the lease-only 2013 Fit EV to $259-per-month from $389 and waived the down payment and mileage restrictions. The California-only Fiat 500e costs $32,500, the  Mitsubishi i-MiEV is $29,975, and the cheapest EV on sale is the 2-door smart fortwo Electric Drive at $25,750. The competition is tough.

The 2013 Volt lease, at $269 per month for 36 months (12,000 miles per year with $2,399 down) isn't as impressive as the deals for the Honda Fit EV or the Nissan Leaf. Even though GM purportedly is losing more than $40,000 off each Volt, dealers have enough cars stocked to last half the year – and that's reason enough for the slashed prices.

But a recent report from the National Automobile Dealers Association found that plug-in hybrids such as the Volt and all-electric cars such as the Leaf were losing far more of their resale value than similar gas-electric hybrids and gasoline-powered cars. For 2012, NADA estimated that all plug-in vehicles lost nearly a third of their value in one year.

By comparison, regular hybrids such as the Toyota Prius and gas-powered cars such as the Honda Civic saw significantly lower depreciation rates of 14 and 12.4 percent, respectively – or less than half that of pricier plug-in hybrids and electric cars. Battery capacity losses and newer technology have made new EVs a relatively poor investment compared with current lease plans, and the current price cuts will cause resale values to decline further.

[Source: GM]


Source: MSN