Slow sales of electric vehicles and the fear of cuts in subsidies to help people buy them are driving down prices.

Latest to announce a cut is Vauxhall which is lopping around £3,000 off the list price of its Ampera, the electric model which also uses a range-extending petrol engine. It follows a similar price reduction for the model announced in Germany on Monday.

Vauxhall chairman Duncan Aldred said: "So far the market for EVs across Europe is only about 30 percent of what the experts forecast and so something has to be done to encourage buyers."

Does that mean Vauxhall will be losing money on the Ampera? "This was never a model that was going to make a lot of money, it is more of an investment in technology. This will be developed further in the future and actually the production costs are coming down all the time. We have to be able to showcase this sort of technology and we feel the time is right anyway to make Ampera more affordable to as many people as possible."

Aldred does not think the future is necessarily electric anyway. "There is still a way to go with the internal combustion engine in terms of fuel efficiency and emissions as well as further reductions in weight."

An announcement is expected soon on a price reduction for the Chevrolet version of the Ampera, the Volt. European chief Thomas Sedren, said that Chevy will follow suit but by how much the price will fall is yet to be decided.