General Motors joins the electric car price war: Time to buy?

On Tuesday, General Motors sliced $5,000 off the cost of the Chevy Volt, joining a price battle between automakers trying to move their plug-in models off the lot.

The 2014 Volt will cost $34,995, and as little as $27,495 after federal tax incentives, which overall represents a 13 percent discount from the previous model.

The move is in line with the competition in the electronic car market. Since January, Nissan has cut the price of the Leaf by $6,000; Honda has trimmed the lease price of the Fit by one-third; and Ford has taken 10 percent off the price of its Focus.

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Two factors are driving prices down. The first is lower manufacturing costs. "We have made great strides in reducing costs as we gain experience with electric vehicles and their components," said Don Johnson, GM's U.S. vice president of Chevrolet sales and service. "We want to pass those cost savings back to consumers, and we have done that with the 2014 model."

Second, carmakers are trying to boost demand following disappointing sales of electric cars.

Electric vehicles have been hailed as a way for consumers to avoid high gas prices, all while reducing the country's addiction to foreign oil. But as oil production rises in the U.S., gas prices have remained pretty stable. Meanwhile, low-cost compact cars have become even more fuel-efficient; the Chevrolet Cruze, for example, goes for around $17,170.

As a result, carmakers have had to reel in their goals, and sell their electric vehicles at a loss. Two years ago, GM forecast it would build 60,000 Volts in 2012, but ended up selling just 23,461. And with plug-ins making up just 0.54 percent of the auto market, sales of other vehicles have had to absorb the losses.

So is now the time to buy for eco-conscious consumers? "Automakers can’t go on losing money with each EV sale indefinitely," says Brad Tuttle at TIME. But there are a lot of other factors to consider:

Until updates go into effect, you're better off leasing, says Tuttle, "not only because lease deals are so inexpensive nowadays, but because consumers who lease don’t risk getting stuck long-term with outdated technology."