General Motors and Daimler AG on Tuesday amped up the electric-car price war, announcing significant price cuts aimed at boosting demand in a still-sluggish segment of the US auto market.

GM slashed $5,000 from the price of its 2014 Chevrolet Volt plug-in hybrid, while Daimler announced a steeply discounted monthly lease price of $139 on its 2013 Smart Fortwo Electric Drive.

Plug-in vehicles such as the gasoline-electric Volt and the pure-electric Fortwo ED have encountered stiff resistance from US consumers, in part because of their higher prices and lack of a nationwide battery charging network.

US sales of plug-in electric and gasoline-electric vehicles through July totaled only 48,889, according to research firm Autodata. That represents just 0.5 per cent of total US vehicle sales of 9.1 million in the first seven months of this year.

The $5,000 cut for the 2014 Volt will lower the price to $34,995, including delivery fees but before federal tax credits.

Smart is offering US dealers a $2,000 wholesale rebate on the 2013 Fortwo ED, effectively lowering the retail price to $23,750. Customers also can opt to lease the tiny battery-powered two-seater for $139 a month for 36 months, with $1,995 down, a 30 per cent discount from the previous monthly lease rate of $199.

Smart has delivered only 173 Fortwo EDs to US customers this year. The brand began offering an upgraded electric motor and battery pack in May and will start selling 2014 models in October. A redesigned Fortwo ED is expected for the 2015 model year.

Even before the latest price cut, the Volt has been one of the best-selling plug-in vehicles, with 11,643 US sales through July.

That is roughly the same number as the battery-powered Nissan Leaf, which has benefited from a hefty $6,000 price cut in January. Including shipping, the 2013 Leaf retails for $29,650.

Both the Volt and the Leaf, however, have been outsold by the pricy Tesla Model S, which starts at nearly $71,000 and accounted for one-quarter of all US plug-in sales through July with 12,200.

Other electric-car competitors have also followed Nissan's lead with steep discounts.

In May, Honda Motor slashed the lease price of its Fit EV subcompact by one-third, to $259 a month. In July, Ford Motor reduced the price of its 2014 Focus Electric compact by 10 per cent, to $35,995.

GM previously had cut the price of the 2013 Volt by $5,000 to help boost demand. In late May, it launched an electric version of the Chevy Spark subcompact with a lower-than-expected starting price of $27,495 and is offering discounted leases on both cars.

The Volt price cut is another step in GM's effort to seize the mantle of "greenest automaker in the world" from Toyota Motor Corp , which makes the popular Prius hybrid car. Toyota also sells a plug-in version of the Prius.

GM did not quantify the cost savings for the 2014 Volt, but has said the next version, due in 2015 or 2016, will cost $7,000 to $10,000 less. The 2014 models will begin arriving at US dealers later this month.

GM is aiming by 2017 to build up to 500,000 vehicles a year with some form of electric power. The vehicles would include the Volt, the Spark EV and those with its eAssist system that boosts fuel efficiency in gas-powered cars.

GM will begin building the Cadillac ELR plug-in electric coup late this year. - Reuters