General Motors has dropped the retail price of its Chevrolet Volt extended-range electric vehicle by $5,000 for the 2014 model-year, to $34,995 (including an $810 destination fee). The automaker said that with federal tax credits up to as much as $7,500, reducing the retail price for the vehicle to $27,495. GM said the reason for the price drop is to broaden its exposure to “price sensitive” potential buyers.

“The lower price and cost savings from driving on electricity provide Volt owners an unmatched balance of technology, capability and cost of ownership,” said Don Johnson, U.S. vice president, Chevrolet sales and service. “The 2014 Volt will offer the same impressive list of features, but for $5,000 less.

According to GM, the 2014 Volt provides fuel economy of 98 MPGe and 35 city, 40 highway, of gasoline. The vehicle can travel up to 38 miles on electric power only, according to EPA estimates, depending on driving conditions. The automaker improved the Volt's fuel efficiency for MY-2013, increasing its MPGe and electric-only range over 2012-MY and earlier models.

GM added that the 2014 Volt is still eligible for single-occupancy HOV lane access in California and New York.