The company did not reveal the price of the vehicle while unveiling it at an event in Los Angeles on Wednesday.
The XC40 Recharge offers a range of over 400 km (WLTP) on a single charge and output of 408hp, Volvo Cars said.
The battery charges to 80 per cent of its capacity in 40 minutes on a fast-charger system.
The Android-powered infotainment system is fully integrated with Volvo On Call, the company's digital connected services platform. Via Volvo On Call plug-in, hybrid drivers can track how much time they spend driving on electric power.
"We have said this several times before: for Volvo Cars, the future is electric," said Volvo CEO Hakan Samuelsson.
"Today we take a major new step in that direction with the launch of our fully electric XC40 and the Recharge car line."
Volvo has pledged to launch a fully electric car every year over the next five years, as it seeks to make all-electric cars 50 per cent of global sales by 2025.
Recharge will be the overarching name for all chargeable Volvos with a fully electric and plug-in hybrid powertrain.
To further encourage electric driving, every Volvo Recharge plug-in hybrid model will come with free electricity for a year, provided through a refund for the average electricity cost during that period.
To meet the anticipated growth in demand for its Recharge cars, Volvo Cars said it will triple production capacity for electrified cars.
Volvo aims for plug-in hybrid cars to make up 20 per cent of total sales in 2020.
( With inputs from IANS )