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 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 points 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," he added.
Jacoby said 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.
"This is a new chapter for Volvo completely independent from Ford and now under Chinese ownership.
"My major focus is to stabilise the business although I have to say that Ford has done a very good job over the past few years and we will continue to have a long lasting relationship with them in terms of engine and platform sharing.
"We are putting together a strategy over the next six months to see how we can grow not only in emerging countries likes China but also in our established markets in Europe and the US."
Jacoby added that Volvo needed to return to its Swedish roots. "Not so much sporty but more functional with Swedish/Scandinavian elegance - different from say Jaguar or Bentley. Simplicity is the key.
We need to stop copying the Germans, we can express what Scandinavia stands for - high values for human beings, strong social security and welfare. We don't have to be the same size or have the same package.
"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."