Has Volvo turned into one of the more progressive-thinking automakers in the world? While it may be a little premature for that, the Swedish automaker continues to make a strong case that it has left behind its old dormant ways in favor of a more aggressive approach towards future sustainability. Proof of that lies with the company’s new three-cylinder “T5” plug-in hybrid engine, which is one of the first of a new generation of high-efficiency gas hybrids that will hit the market when the new Volvo XC40 arrives. Volvo’s plan is to eventually use this engine on lower and middle tier models, and according to CEO Hakan Samuelsson, this new engine type could become popular enough in various formats to effectively replace diesel engines.

It’s a bold statement that fits into Volvo’s new-found bravado in the automotive industry. It also could turn into an accurate statement if emissions standards throughout the world become tougher, it would become more difficult for a lot of automakers to justify the use of diesel engines when a better alternative is already available. Samuelsson added that the T5 gas-hybrid engine “offers much lower CO2 levels but more or less the same performance in both horsepower and torque.” If the engine lives up to Volvo's expectations, it could pave the way for the company to phase out diesel engines all together.

A big part of that will depend on the T5 engine’s emissions and economy data, and while the company has yet to release the details of those figures, it did say it expects the engine to emit less than 95g/km in European testing. That number would not only bring tax benefits in a lot of countries, but it could also be used as the official Euro target for fleet-average emissions.

That said, Samuelsson resisted on making any bold proclamations since that scenario isn’t a certainty yet. But it could happen, and as a company, Volvo is preparing for all the possibilities.

Continue after the jump to read the full story.

Why it matters

The whole specifics of what Volvo CEO Hakan Samuelsson is alluding to isn’t going to have an answer anytime soon. For that possibility to be presented more as a reality, there’s a lot of pressure on the T5 gas-hybrid engine to live up to the hype. I’m not going to pretend to know the intricacies of the T5 engine relative to a diesel, but I do understand the implications if Volvo decides to veer away from diesel engines and shift its focus on gas-hybrids.

It’s a big step as the T5 is already capable of delivering fuel economy on the level of a diesel engine and having these two types of engines in the fold wouldn’t make sense, especially if Volvo can show that one is better than the other. In the present, the company has already shown confidence on what the T5 hybrid engine can do. It really won't take much to decide that gas-hybrids are the better alternative to diesel engines.

I’m very intrigued to see how this plays out because if Volvo pushes through with this shift, it could start a ground-breaking change that will be felt by the entire industry. It’s a position that I never thought Volvo could be in, but considering the renewed vigor and passion the Swedish automaker has shown in recent years, it wouldn’t be surprising to see the company take the lead in this movement as it has shown that it’s no longer afraid and wary of potential game-changing moments like this. Good for you, Volvo.

Volvo XC40

Read our full review on the Volvo XC40 here.