General Motors has cut the base price of its 2014 Chevrolet Volt plug-in hybrid sedan by $5,000 to help improve disappointing sales in the U.S.

The 2014 Volt will be sold for a starting price of $34,995 according to GM.

"GM is getting with the times," Michelle Krebs, a senior analyst with Edmunds, said according to Bloomberg Businessweek. "Consumers want electric and plug-in hybrid vehicles at prices competitive with other vehicles without the advanced technology."

The Volt is eligible for a $7,500 U.S. tax credit according to GM. The automaker is hoping to have 500,000 vehicles on the road by 2017, with around half of them being electric models.

The new model can go 38 miles on a single charge before a driver has to switch to its gasoline engine.

"We have made great strides in reducing costs as we gain experience with electric vehicles and their components," Don Johnson, Chevrolet U.S. sales vice president, said in a press statement.

The Volt will arrive in the U.S. dealerships by the end of this month. The 2011 model was named North American Car of the Year, and 92 percent of those who were surveyed said they would by another Volt.

The price reduction was also decided on to help the Volt compete against Toyota's Prius and Nissan Leaf. The Prius is sold for $25,010 and the Leaf is sold for $29,650, respectively.

"We know we have to reduce costs," Akerson said during an interview according to Bloomberg Businessweek. "We've got to look at smart ways at getting it better positioned from a price perspective and that means we've got to take cost out of it."

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