GM cuts Volt electric car price by $5,000 for 2014 model (Fire sale?)

DETROIT (Reuters) - General Motors Co (GM) said on Tuesday it is slashing the price of its Chevrolet Volt electric car by $5,000 to help boost demand for the plug-in hybrid in a segment still struggling to gain a foothold in the U.S. auto market. The price cut for the 2014 model will lower the price to $34,995, including delivery fees before federal tax credits. Pricing could fall as low as $27,495 with the tax credit. "We have made great strides in reducing costs as we gain experience with electric vehicles and their components," Don Johnson, U.S. vice president for Chevy sales, said in a statement. 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 $7,000 to $10,000 less. The 2014 models will begin arriving at dealer stores later this month. "Chevrolet has quickly discovered that when price savings at the pump and ultimately value are your key selling points, a $40,000 cost of entry makes for a difficult hurdle to overcome for most budget conscious consumers," Kelley Blue Book senior analyst Alec Gutierrez said. He expects GM to roll out aggressively priced lease deals on the new Volt.

"Where is the power grid overstressed?"

This is entirely a local situation due to being on an island with "booming" population. All power must traverse Puget Sound, either by cable along a bridge, overhead, or submarine. There is very limited space available on the bridge (two-lane/small), and the existing submarine cable is OLD, and sized for a much smaller rural population (note that this is an REA transmission utility co-op area). I'm not exactly sure why "overhead" was ruled out, but it was.

The local REA has been pushing any and all means to reduce demand (subsidies for any heat-pump installation, any new high efficiencey water heater, "smart" water heaters, and on and on). Last winter we came close to a "rolling blackout" situation.

A new and much larger submarine cable is currently going in (using directional drilling). The new cable will not only be under water, but will be in an actual small drilled tunnel (actually an empty pipeline!) beneath the Puget Sound "floor". But it isn't ready to go just yet. I hope it is done before the next round of cold weather arrives.

"It’s a real stretch for me to believe that enough cars powered by juice will be sold to that population to have a significant effect before the upgrade is in place."

I hope you're right. But the utility seems to think otherwise, given the many and varied efforts undertaken to reduce demand.

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