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GM to suspend Chevy Volt production

Even with rising gas prices, the US automaker isn't selling the electric cars quickly enough.

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The Chevrolet Volt on display at the 2012 Washington Auto Show in Washington, DC. on Jan. 31, 2012. (Karen Bleier/AFP/Getty Images)

Even gas prices approaching $5 a gallon in the US hasn't kept General Motors from having to suspend production of its electric Chevrolet Volt again.

The US automaker on Friday said it would stop production of the Volt for five weeks starting later this month because dealers already have more of the electric cars on hand than they need, The New York Times reported

The suspension will mean temporary layoffs for about 1,300 workers at a Detroit plant that builds the Volt, the paper said.

Production at the plant is scheduled to stop March 16 and resume April 23, a G.M. spokesman told the Times. 

The Volt, a plug-in hybrid electric vehicle, has had a troubled existence since its launch in December 2010. Sales fell short of G.M.'s targets last year, and the latest production stoppage will be the third of more than a month since the car went on sale. 

The Volt's problems come even though US auto sales are surging, having posted their quickest acceleration in years in February. 

“Everyone’s kind of blowing us out of the water,” Alec Gutierrez, an analyst for Kelley Blue Book, told Bloomberg News. “For fuel-efficient vehicles, we expected to see demand as gasoline prices really surged through the month, but the big surprise is on the truck front. It speaks to the broad-based nature of this recovery.”

And they come as gas prices keep surging in the U.S. American gas prices have been rising new records on a daily basis, and AAA said drivers in three American states already are paying an average of more than $4 per gallon. Hawaii drivers pay an average of $4.32 a gallon, California drivers $4.29 a gallon and Alaska drivers $4.09 a gallon, AAA said. 

Drivers in only two states - Wyoming and Colorado - pay less than $3.20 a gallon, it noted. 

More from GlobalPost: Gas prices may hit $5 a gallon in the US 

The Volt may be getting left out of the auto sector's return to strength because of its high price, USA TODAY suggested. The Volt has sticker price of $41,000 and costs more than $33,000 accounting for government subsidies aimed at promoting sales.

It also has been the subject of a federal investigation into whether its battery packs could catch fire after an accident. 

"Regulators concluded that the car was no more dangerous than a traditional gasoline-powered vehicle, though G.M. agreed to strengthen the structure around the battery," The New York Times said.

Still G.M. has about 3,600 Volts in its inventory, the paper noted. GM officials also have backed away from previous rosy sales projections.

Last year, GM sold 7,671 Volts instead of the 10,000 it had aimed to move. 

GM sold 1,023 Volts in February, nearly double what it sold in January. 

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http://www.globalpost.com/dispatch/news/regions/americas/united-states/120302/chevy-volt-production-cuts