Volvo Car Group revealed today that its performance brand Polestar will exclusively produce electric cars and showed off its first model.
Polestar will also have its own new purpose-built production facility in China.
The brand's first car, the 600hp Polestar 1, is set to come out in 2019, retailing for upwards of £130,000.
It is a two-door, four-seater electric car supported by an internal combustion engine.
Its range of 150km on electric power alone gives it the longest-running electric range of any hybrid car on the market, according to Volvo.
Polestar also said it plans to "move away from today’s traditional ownership model".
Cars will be ordered online and offered on a two or three year subscription basis with monthly payments. But there will also be stanadalone Polestar showrooms.
Thomas Ingenlath, Chief Executive Officer of Polestar said: “Polestar 1 is the first car to carry the Polestar on the bonnet. A beautiful GT with amazing technology packed into it - a great start for our new Polestar brand. All future cars from Polestar will feature a fully electric drivetrain, delivering on our brand vision of being the new standalone electric performance brand".
All Volvo cars will have either partially or wholly electric options from 2019, making the company the first traditional car manufacturer to make such a commitment.
It said today that synergies within the Volvo Car Group would help to accelerate the Polestar brand in terms of design and development.