Production of 2014 Chevy Volts Begins, Along With a $5,000 Price Cut

General Motors announced that the 2014 edition of the Chevy Volt will start rolling off the assembly line at GM’s Detroit-Hamtramck assembly plant today. They also announced that when those new Volts arrive at dealers in a few weeks they’ll be $5,000 cheaper than the 2013 model. The move is in response to price cuts and lease deals on competitors’ EVs. After Nissan cut the price of the Leaf by $6,400 in January, its sales are up 300% from last year for the first half of 2013, just barely outselling the Volt. In July, Ford lowered the price of the Focus Electric by $4,000 and the recently launched Fiat 500e and Chevrolet Spark EV are offering $199/month leases.

The base MSRP on the 2014 Volt’s Monroney label will read $34,995, plus $810 to get it from the factory to the dealer. After applying the $7,500 federal tax credit, that puts the effective price of the Volt at $27,495, about what a nicely equipped Chevy Cruze would cost. One of the criticisms of the Volt has been that it’s expensive compared to the Cruze, with which the Volt shares a platform.

So far this year, Volt sales are up 9% to 11,463.

GM said that it has made “great strides” in reducing the manufacturing cost of the Volt, though no dollar figures were released. GM execs have said that the 2nd generation Volt, scheduled to go on sale in 2015, will cost them between $5,000 and $10,000 a unit less to build than the current model.

Apparently one reason for the current price cut is how people now use the internet to shop for cars. The lower MSRP is expected help the Volt show up in consumers’ search results. “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.

Though the recent price cuts have raised the sale of EVs and PEVs, they’re still a small fraction of the market. Total U.S. sales of EVs and plug-in hybrids were 41,447 units for the first six months of the year. Chrysler sold more Darts that that figure, and the Dart isn’t exactly moving up the sales charts in its segment.

Chevy dealers were already discounting the Volts they had in stock and GM itself is offering rebates of $4,000 on 2013 Volts and $5,000 on the 2012 models still in stock, so the price cut is not going to have much of a real world effect on transaction prices. Truecar.com reports that the average transaction price on the Volts that were s0ld was $38,578, with a total average incentive per car at $10,489. The dealer part of those incentives are essentially subsidized by a GM bonus program for dealers who hit company determined sales objectives.