Volvo is currently developing a plug-in hybrid prototype based on its funky C30 hatch, which it hopes will be ready in time for November’s Michelin Challenge Bibendum in Shanghai. Unlike conventional hybrids, which use an internal combustion engine to drive the wheels during high-load, the Volvo prototype will employ an efficient diesel engine to generate electrical energy to power four in-wheel electric motors. A bank of batteries that can be charged by mains power at home will allow the vehicle to travel up to 45 miles on electrical power alone when fully charged.

Volvo is serious about building a marketable hybrid model. The company has already established its own Hybrid Development Centre in Gothenburg, Sweden. It has also bought a stake in Chemrec AB, a company involved in the development of alternative fuels. Anders Brännström, President of Volvo Technology Transfer, has stated that the company has “no intention of becoming a fuel supplier but wishes instead to continue to conduct engine development on a broad front.”