Volvo will introduce an electric version of its C30 into small fleets next year and a plug-in hybrid V60 will be available from 2012 with emissions of just 50g/km of CO2.

In one of his first interviews since taking over as chief executive officer since the takeover by Chinese carmaker Geely, Stefan Jacoby said that safety and the environment will remain key planks of Volvo's future strategy.

"The company will continue to develop petrol and diesel engines but it is working on the electrification of its technologies", he said. "EVs are not yet competitive but we will achieve economies of scale as the market builds. Battery prices are already coming down."

Jacoby said that Volvo was working on putting the batteries in the central tunnel through the passenger cabin both for safety and for vehicle balance, as well as being able to use larger batteries for greater range. He added that his vision was also to double production to 800,000 vehicles a year by 2020.

"We don't want to put technology into our cars for the sake of it. We want technology that is easy for people to understand and use. They need to be comfortable with it."