Based in Sweden, Polestar has to date offered performance-boosting software upgrades for Volvo’s cars, as well as versions of the S60 and V6. It has also worked with Volvo in motorsport since 1996, though the racing division was not included in the acquisition.

In its announcement, Volvo said it expects to step up sales of the existing Polestar models, adding that it wants to combine the company’s knowledge with its specialism in high-powered plug-in hybrids, to develop new performance models.

The carmaker’s T8 Twin Engine system, fitted to the new XC90, combines a turbocharged and supercharged petrol engine with an electric motor driving the rear wheels, producing a combined 403bhp with CO2 emissions of 49g/km.

 Håkan Samuelsson, president and chief executive of Volvo Cars, said: “Driving a Volvo Polestar is a special experience. We have decided to bring this experience to more Volvo drivers, placing the full resources of Volvo behind the development of Polestar as the model name for our high performance cars.”