THE WORLD'S FIRST DIESEL PLUG-IN HYBRID - THREE CARS IN ONE

At the 2011 Geneva Motor Show, Volvo Cars will be unveiling the world's first diesel plug-in
hybrid - a virtually production-ready Volvo V60 with carbon dioxide emissions below 50 g/km.
The Plug-in Hybrid, which will be launched in the market in 2012, is the result of close co-
operation between Volvo Cars and Swedish energy supplier Vattenfall.

The concept of a plug-in diesel hybrid gives the driver the very best of what an electric and
diesel car can offer: very low fuel consumption and CO2 levels, combined with long range and
high performance.

By simply pressing a button, the car gives the driver the option of how they want to drive:

* An electric car with a range of up to 32 miles.

* A high-efficiency hybrid with carbon dioxide emissions averaging just 49 g/km.
* A dynamic and engaging car with a combined output of 215 + 70 horsepower, 440 + 200 Nm
of torque and acceleration from 0 to 62 mph of just 6.9 seconds.

The front wheels of the V60 Plug-in Hybrid will be driven by a five-cylinder 2.4-litre D5 turbo
diesel, which produces 215 horsepower and maximum torque of 440 Nm.

The rear axle features ERAD (Electric Rear Axle Drive) in the form of an electric motor producing
70 horsepower, which receives its power from a 12 kWh lithium-ion battery pack. The car
features a six-speed automatic transmission.

The driver chooses the preferred driving mode via three buttons on the instrument panel: Pure,
Hybrid and Power. The interaction between diesel and electric power is handled via a control
system.

"The second-generation hybrid is the perfect choice for the uncompromising buyer who wants
a superbly carbon dioxide-lean car packed with driving pleasure. To get drivers to think green,
we have offered both, in one traditional genuine sports wagon" says Stefan Jacoby, President
and CEO of Volvo Cars. He adds: "The technology is still undergoing development and testing,
however, the car already points very clearly to what our customers can expect when the plug-in
hybrid enters showrooms next year. What we've done is to spice it up with spearhead
technology that allows the driver to choose: zero emissions, high-efficiency hybrid or full-on
performance. Just select the mode that suits best."
The Pure, Hybrid and Power driving modes give the V60 Plug-in Hybrid three different
temperaments:

* In Pure the car runs only on its electric motor as much as possible. If the battery has been
recharged using electricity from a renewable source supplied by Vettenfall, the driving range is
up to 32 miles with zero emissions of carbon dioxide. Battery range varies with terrain, climate
and driving style.
* Hybrid is the default mode whenever the car is started. The diesel engine and electric motor
interact to provide the optimal balance between driving pleasure and low environmental
impact. Emissions of CO2 are 49 g/km (EU Combined), corresponding to diesel fuel
consumption of 150 mpg. The car's total range is up to 746 miles.
* In Power mode the technology is optimised to give the car the best possible performance. The
diesel engine and electric motor have a combined power output of 215 + 70 horsepower and
maximum torque of 440 + 200 Nm. The electric motor's lightning-quick torque delivery
contributes to the car's 0 to 62 mph acceleration time of 6.9 seconds.

The majority of all European car drivers cover less than 32 miles a day, for instance to and from
work. On longer trips, the diesel engine is activated automatically, giving the car the same
properties and range as a conventional hybrid.

The cost of the battery pack means the plug-in hybrid will be more expensive to buy than a
Volvo V60 with a conventional combustion engine. Pricing will be announced nearer the 2012
launch date. On the other hand, fuel costs are expected to be one-third of a conventional
combustion engined V60.

The plug-in hybrid can be charged via a regular household electricity socket at home or
elsewhere. Charging time is about five hours if the car is recharged at home.

In addition to its three driving modes, the V60 Plug-in Hybrid features a number of other
possibilities and benefits:

* The driver can choose to save battery capacity in order to be sure of driving on clean
electricity later, for instance after entering the city. In order to maintain a sufficient battery
charge level, the car is powered by its diesel engine.
* Pushing the AWD button in the centre stack activates electric four-wheel drive. Instead of the
mechanical power transmission of the conventional AWD system, the central control unit
manages torque distribution to the diesel-driven front wheels and the electrically powered rear
axle.
* Using the car setup menu, the driver can key in the planned route's distance (short, medium
or long). The control system calculates the balance between diesel and electric power to obtain
the lowest possible CO2 emissions for the given distance.

The Volvo V60 Plug-in Hybrid is recharged via a regular power socket (230V/6A, 10A or 16A).
The charging time depends on the level of the current. A full 10A charge takes 4.5 hours. The
time is shortened to 3 hours with 16A, while a charge in a 6A socket takes 7.5 hours.

The driver has the possibility to preheat or cool the passenger compartment during the
recharging process. This means that more battery capacity can be used for powering the car.
This pre-conditioning is programmed via a timer in the car's setup menu or remotely via a
mobile phone. Via the mobile app, it also gives the owner access to a number of smart features,
such as a reminder to plug in the charging cable if this hasn't been done at a certain pre-set
time.

The instrument panel in the Volvo V60 Plug-in Hybrid has been modified to give the driver a full
range of important information about diesel and electricity consumption, battery charge level
and remaining range.

On the outside the car has several additional features that emphasise its CO2-lean profile, such
as lightweight wheels with exceptionally low air drag and Pirelli tyres designed for low rolling
resistance.

Uncompromised Safety

The Volvo V60 Plug-in Hybrid includes a systematic approach to all safety aspects related to
battery power. The basic perspective is that the battery-powered Volvo must be as safe as any
other new Volvo car - when it comes to owning and driving and also in the event of an accident.

"We apply the same high safety standards to all our products but the safety-related challenges
may differ depending on the driveline and fuel being used. To us, electrification technology is
another exciting challenge in our quest to build the safest cars on the market," says Jan
Ivarsson, Senior Manager Safety Strategy & Requirements at Volvo Cars. He adds: "It is
understandable that a lot of questions about electrification safety are related to what will
happen in an accident but it is important to have a holistic approach including all the aspects of
day-to-day usage of the car."

Volvo Cars is currently conducting wide-ranging and thorough analysis of a variety of safety
scenarios for cars with electric power, including virtual and real life tests in Volvo's own crash-
test centre. Through advanced automatic monitoring of battery status and by encapsulating the
battery and protecting it effectively in a collision, the result is a world-class safety level.

"Based on our significant database with input from actual road incidents and accidents, we
know where the focus must lie in everyday traffic conditions. The solutions we have developed
for the V60 Plug-in Hybrid takes into account the situations that are unique to this type of car,"
says Jan Ivarsson.

"We have carried out full-scale crash tests with different load cases, such as frontal, rear and
side collisions to confirm that the battery technology fulfils our safety requirements," reveals
Jan Ivarsson. He adds: "The lithium-ion batteries are separated from the crumple zones and the
occupants' compartment."

All safety systems in the Volvo V60 will also be available in the plug-in hybrid version. However,
electric power also adds new possible safety scenarios and these too must be dealt with.
Volvo's safety experts have analysed the five accident sequence phases and developed unique
solutions for the battery and for protection of the occupants as necessary.

When Volvo Cars analyses traffic situations from a safety perspective, the engineers use a
model that illustrates the sequence of events during the whole driving phase. The process is
divided into five phases and based on these, Volvo develops new safety solutions and improves
existing ones.

1. Normal driving: An advanced monitoring system keeps watch and ensures that each cell
maintains the correct voltage level and optimal operating temperature by regulating the
cooling system. This is of significance to both safety and battery capacity. In the event of any
deviation, the battery is automatically shut down as a preventive measure.

2. Conflict: The battery adds weight that alters the standard vehicle's dynamics, for instance in
fast avoidance manoeuvres. The braking system has been enhanced to handle the increased
mass, and DSTC (Dynamic Stability and Traction Control) helps the driver contain the situation.

3. Avoidance: If a frontal collision is imminent and the driver is acting too late to brake the car,
the V60 Plug-in Hybrid can activate automatic systems such as Collision Warning with Full Auto
Brake and City Safety to help avoid or reduce the effects of an collision.

4. Collision: To reduce the effects of a collision, the battery package is encapsulated and is
protected and separated from the car's crumple zones and the occupants' compartment. Steel
beams and the structure around the battery are reinforced to help protect it. If the battery is
damaged, resulting in gas leakage, there are ducts that lead the gas out under the car. In
extreme heat, the occupants are shielded by the battery's protection. At the moment of impact,
crash sensors send information about the collision to the car's computer to shut off the power
supply to reduce the risk of a short-circuit.

5. After the collision: The battery has a security cut-out that functions like a household earth
fault circuit breaker. It shuts down and isolates the battery if the current travels in the wrong
direction, for instance if two cables are pressed together as a result of an accident. Volvo also
works with the emergency rescue services, providing them with detailed instructions on how to
handle various Volvo models in the event of an accident.

Volvo Cars and the battery manufacturers have far-reaching product responsibility as regards
both production and recycling. This ensures proper handling of the battery when it comes to
the end of its life in the car.

Electric power offers a range of benefits

Electrification of the transport sector is an important step in the fight against climate change.
Electricity is a highly beneficial fuel:

* An electric motor is almost four times as efficient as a regular combustion engine. This means
that an electrically powered car consumes less energy and thus produces lower emissions, even
if it is powered by a blend of electricity sources that include fossil fuels.
* European electricity production has an emission ceiling. This means that even if all vehicles
were to run on electricity, electricity production itself is not allowed to produce more carbon
dioxide. This emission ceiling will be gradually lowered over a period of time.
* Electricity is an excellent source of energy. It does not risk running out, and it can be
produced virtually without any CO2 emissions.
* Emissions from millions of exhaust tailpipes are transferred to a small number of production
facilities, which are easier to control and which will operate on the basis of the EU's trade in
emission rights, something that does not apply to the transport sector at present.
* Electric vehicles use relatively little electricity and the increase in consumption will be more
than covered by ambitious expansion plans for renewable energy sources throughout Europe. A
single wind-power station, for instance, produces sufficient renewable energy to power 3,000
electric cars.
Electricity production is undergoing rapid expansion. Wind-power is being commercially
introduced on a large scale and is continuing to expand, biofuels will replace fossil fuels on a
broad front, wave-power is expected to enter commercial operation within ten years, and new
technology to clean CO2 emissions from coal-fired power stations is currently under
development.

Volvo Cars in Partnership with Vattenfall

In January 2007, Volvo Cars and Vattenfall launched an industrial partnership whose aim was to
test and develop plug-in technology. This cross-border initiative resulted in the foundation of a
jointly owned company - V2 Plug-in-Hybrid Vehicle Partnership,

"No industry or organisation can tackle the climate challenge all by itself. It is our mission to
develop carbon dioxide-lean cars, but a sustainable future must be created jointly by everyone
in society. This project shows how cooperation between experts in different areas brings us
closer to the transition from individually carbon dioxide-lean products to a climate-smart
lifestyle," says Stefan Jacoby.

"With our latest development we are once again demonstrating our leadership in the
environmental field by being first to market hybrid technology in an entirely new dimension,"
He adds: "Having Vattenfall in the electricity generating industry as a partner gives us an added
strength. It allows us to be on the inside and shape developments in this area, for instance
when it comes to clean electricity and infrastructure. We will also offer our customers a
climate-neutral electricity supply contract when our plug-in hybrid enters series production."

"We're taking a giant step forward towards our "DRIVe Towards Zero" vision, that is to say the
hunt for zero emissions. In fact, when the V60 Plug-in Hybrid is run solely on electricity and
recharged using renewable energy, we've already reached that goal."

"Backed by the innovative power and spearhead technological competence of two industries,
we have succeeded in creating a car that is truly unique in the automotive world. I'm very
proud of the fact that Vattenfall and Volvo Cars are the driving forces behind the development
of transport solutions that tackle climate issues and society's oil dependency. With renewable
electricity from Vattenfall, the plug-in hybrid can be driven with minimised climate impact and
local emissions. The result of the project emphasises that the future of the car lies in
electrification," says Vattenfall's President and CEO Øystein Løseth.

The Future of Production

Everything from the way the car is produced, used and serviced to the way they are recycled is
analysed thoroughly and the information obtained is used to shape the development of the
production car. At Volvo Cars, work progresses on the V60 Plug-in Hybrid in parallel with
development of the Volvo C30 Electric, which runs entirely on electricity.

"These two car types complement one another. With a plug-in hybrid the driver is entirely
independent of recharging stations when driving long distances. The future electric-car market
will feature a mixture of both all-electric cars and plug-in hybrids," says Stefan Jacoby.

The third leg in Volvo Cars' electrification strategy is empowering the upcoming engine
generation with hybrid technology.