Volvo will start selling its V60 Plug-in hybrid diesel car next year in Europe.
The hybrid is the result of co-operation between Volvo and Swedish energy supplier Vattenfall.
"It is our mission to develop carbon dioxide-lean cars, but it is the society that is responsible for creating a sustainable future," says Stefan Jacoby, the president and CEO of Volvo.
"This project shows how co-operation between experts in different areas brings us closer to the transition from individually carbon dioxide-lean products to a climate-smart lifestyle."
When powered solely by electricity, the V60 Plug-in hybrid has a range of up to 50km.