The manufacturer says its new battery could offer a real-world range of up to 621 miles, almost double the capacity of Tesla. The battery is being developed alongside Swedish company Northvolt and is expected to be ready by 2025 at the earliest.
From the launch of the new XC90, Volvo will offer bi-directional charging.
This will allow customers to offload excess electricity from their car battery straight back to the power grid.
This means drivers can power the grid when electricity production and prices are at their daily peak before charging their car when demand is down.
Mr Green said the new battery will offer a “sustainable” upgrade which will make drivers lives easier.