It should go down to 1.000 (or lower).
You can add sugar. You should dissolve it in a little boiling water first and then cool it and add it as sugar. Unfortunately we don't know what yeast was used, so we don't know the alcohol tolerance of it. But I would suspect half a pound per gallon would not be a problem. That would raise the abv by about 2.5%.
Alternatively you could add apple juice concentrate which would also raise the abv.
I think I would let it ferment out. I think you are tasting the sweetness of an unfinished fermentation which is disguiseing the alcohol.
Assuming 1.040 was the SG, if it ferments out to 1.000, you will have a little over 5% abv. At 1.011, it is almost 4%.
You do know that you can just buy apple juice (without preservatives), or juice concentrate and add yeast and you will get a higher SG that you got with your kit. I generally just buy juice, add yeast (no sugar), and end up with about 6% abv.