(Yicai) May 8 -- Swedish automaker Volvo Cars, a subsidiary of China's Zhejiang Geely Holding Group, has unveiled its first plug-in hybrid electric vehicle built on its new Volvo Scalable Product Architecture.

The XC70 is a mid-to-large sports utility vehicle with a pure electric range exceeding 200 kilometers, based on results from the China Light-Duty Vehicle Test Cycle, making it Volvo's PHEV model with the longest range, according to information disclosed by the carmaker at the launch event in Shanghai yesterday.

The release of this new PHEV model is part of Volvo's strategic plan to seize a share of China's niche premium hybrid car market at the expense of other traditional luxury carmakers, according to industry analysts.

"The core challenge for legacy luxury brands in electrification isn't brand erosion but the lack of competitive products," Wu Zhenhao, vice president of strategy and products at Volvo Asia Pacific, said during the launch event.

China's plug-in hybrid and extended-range EV markets are growing at twice the pace of the pure EV market, creating a critical opportunity for traditional premium brands to accelerate their energy transition, Wu noted.

Traditional luxury automakers primarily focused on pure EV models for their electrification transitions, but the rapid growth of China's PHEV market has presented them with an alternative path.

Pure EVs accounted for nearly 60 percent of China's new energy vehicle sales last year, a decline of around 10 percentage points from the previous year, according to the China Association of Automobile Manufacturers. Meanwhile, the proportion of PHEV sales to the total rose around 10 percentage points to over 40 percent.

In March, China's NEV penetration rate among domestic brands reached 72 percent, compared with 35 percent for luxury automakers, according to the latest data from the China Passenger Car Association. BMW was the luxury carmaker with the highest NEV penetration rate of 14.3 percent, while Volvo's was only 10.4 percent.

According to its product roadmap, Volvo plans to aggressively expand into the Chinese NEV market this year, launching seven new fuel-powered, plug-in hybrid, and pure electric models.

Editor: Futura Costaglione