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The 2016 XC90 T8 is an all-new SUV from the ground up and will compete with other plug-in hybrid SUVs, like the BMW X5, Mercedes-Benz GLE and Porsche Cayenne. Besides the fact that the XC90 T8 can hold seven passengers, the one advantage the SUV has over its competitors is the fact that it was designed to be a plug-in hybrid from the start. What does that mean? While its competitors have to sacrifice some cargo space for the battery pack, the XC90 T8’s battery has been designed to fit in a tunnel between the two front seats, which means that its cargo space is exactly the same as the gasoline-powered version.

Related: Volvo plans to release hybrid versions of its entire lineup

The XC90 T8 is powered by a 2.0L supercharged and turbocharged four-cylinder engine and two electric motors. The four-cylinder and one of the electric motors, power the front wheels, while the second 80 horsepower electric motor drives the rear wheels. The system generates power that’s on par with a gas guzzling V8 at 400 horsepower and 472 lb-ft. of torque. Volvo estimates that drivers will be able to travel around 17 miles in electric mode, while the XC90 T8 is rated at 56 MPGe. It will take about 2.5 hours to fully recharge the battery using a 240-volt charger.

Inside you’d never realize that you are driving a “green” car since the interior is incredibly luxurious with soft leather seats, metal and leather covering almost every surface. The dominant feature in the interior is a 9-inch touchscreen that houses all the functions for the audio and navigation systems, air conditioning and even adjustments for the front two seats. There’s also an illuminated shift lever that isn’t plastic, instead it’s real Orrefors crystal. It’s a nice touch every time you reach for the shifter. Overall the interior feels airy thanks to the large panoramic roof and it will even fit two average sized adults in the third row seats for short trips.

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How does it drive? During back-to-back tests of the gasoline-only powered XC90 T6 and the plug-in hybrid XC90 T8 the XC90 T8 revealed itself as not only the “greener” choice, but also as the sportiest of the two models. The XC90 T8 has five different driving modes: Pure, Hybrid, Power, All-Wheel-Drive and Save. The default mode is Hybrid, which uses a mix of both the electric motors and the gas engine to find the most efficient drive settings. The Pure mode allows you to drive in electric mode with only the rear electric motor powering the large SUV for up to 17 miles at speeds up to 80 mph. The Power and All-Wheel-Drive modes provide the sportiest settings, while the Save mode turns off the electric motors to save the battery power for certain situations, like driving in the city.

During our short drive with the T8 I switched back and forth between the five different modes and even though the XC90 T8 weighs around 5,000 pounds, the electric motor on the rear axle has enough power to power the SUV on its own. In Power mode, the combination of the four-cylinder engine and electric motors gives the XC90 T8 power that i’d expect from a larger V8 engine. The T8 is definitely the model to choose if you want a more spirited drive.

Pricing for the Volvo XC90 T8 starts at $68,100 for the base Momentum trim level, while the top spec XC90 T8 Inscription starts at $71,600. At the end of my time with the XC90 T8 I walked away mostly impressed. Even though it packs two electric motors and a large battery pack, there isn’t compromise here. The interior volume is exactly the same and the electric powertrain makes the XC90 T8 feel a bit sportier than the standard gas powered XC90 T6. The days of having to drive a large gas-guzzling Chevy Suburban to fit all the kids will soon be behind us.

+ Volvo

Images via Marc Carter for Inhabitat