Volvo has said that it will launch a mid-size battery-electric car with a range of around 523km (325 miles). Designed to rival the Tesla, it is likely to be an SUV rather than a saloon. In the meantime, the firm has committed to launch a plug-in hybrid version of every new model it launches in the next five years.

Volvo has said that the first step in this programme is the introduction of plug-in electric versions of its larger cars, the 60-series and 90-series models, that already utilise the company's new large Scalable Platform Architecture (SPA) designed from the outset for electrification. The first of these models is the Volvo XC90 T8 Twin Engine all-wheel drive which delivers more than 407bhp and has a pure electric range of around 40.23km. There will also be a plug-in version of the forthcoming Volvo S90 large saloon.

According to Volvo, this move follows improvements in battery technology, falling costs and the wide public acceptance of electric cars. "The time has come for electric cars to cease being a niche technology and enter the mainstream," said Volvo president and CEO, Håkan Samuelsson. "We are confident that in two years' time 10% of Volvo's global sales will be electrified cars."

The Swedish firm is also planning to launch a front-wheel drive Twin Engine powertrain set-up, so that plug-in hybrids which don't need it need not have the complexity and weight disadvantages of a four-wheel drive. At a later stage, an entirely new range of 40-series Volvos, using the Geely-Volvo Compact Modular Architecture (CMA) platform will be introduced, all offering plug-in hybrid versions.