Volvo has announced that it will produce a diesel and battery-powered hybrid model by 2012.
The car will emit less than 50g/km of carbon dioxide and average an impressive 148.6mpg, while offering the same safety and comfort standards as a conventional Volvo.
Most drivers will use electric power
The company believes that battery power alone will meet the needs of 75% of European drivers. The car's electric-only range is 31 miles with zero CO2 emissions.
Over longer distances, the diesel engine kicks in, giving the car an extended range of up to 745 miles.
Powering the battery
The car's lithium-ion battery can be recharged at home, via a normal domestic socket, in around five hours.
When the car is being driven, energy created during braking is captured to recharge the battery.
Expensive batteries mean that a hybrid model will cost more than a conventional diesel-engined car, but running costs will be reduced. However, Volvo acknowledges that the cut in running costs will not fully outweigh the higher purchase price.
Volvo expects a limited number of customers for the plug-in hybrid in 2012, but believes more will follow once battery prices fall.
• Volvo is aiming for a crash-free future, with no one killed or injured in one of its cars by 2020.