Volvos upgraded by Polestar compete in the Nuerburgring FIA World Touring Car Championship (Photo: Volvo)

Volvo Cars is forming a separate division to build electrified high-performance cars, in a move that underlines how the global automotive industry is readying itself for rapid growth in electric vehicle sales.

The Swedish premium car group said its performance car unit, Polestar, will become a new separately branded company headed by Volvo's design chief, Thomas Ingenlath.

Ingenlath will be succeeded at the core Volvo brand by Robin Page, who until now has been in charge of interior design.

Volvo's move comes amid expectations that EV sales, still only a minute part of the global car market, will continue to grow at a rapid pace. Within a few years, therefore, EVs could start to become a more significant part of the market.

Almost all car brands are selling electrically powered models, but many of them are modified versions of mainstream models. Premium sports car maker Tesla, however, has shown that electrically powered performance sports cars are attractive to potential buyers of EVs.

Volvo CEO Hakan Samuelsson said Ingenlath's appointment underscores that Polestar is intended to be "a truly differentiated stand-alone brand" within the group.

'With Polestar, we are able to offer electrified cars to the world’s most demanding, progressive drivers in all market segments,” Samuelsson said in a statement.

Polestar-branded cars will no longer carry a Volvo logo.

Volvo Cars acquired 100 pc of its long-standing motorsports partner Polestar Performance in 2015. The unit has been manufacturing performance versions of the Volvo S60 and V60. It also offers performance hardware upgrades and engine software optimizations for Volvo cars.

-By Arjen Bongard