Volvo Car Corp. says it will launch a plug-in diesel hybrid in 2012 that boasts a range of 746 miles (1,200 km) while achieving 123.7 mpg (1.9L/100 km).

Volvo’s plug-in electric hybrid will be able to run up to 31 miles (50 km) on electric power before the diesel mill kicks in, a range that will cover the daily transport needs of 75% of European drivers, the auto maker says.

The PHEV’s lithium-ion battery will take about five hours to recharge via a household wall socket, Volvo says. A battery supplier for the vehicle has yet to be announced.

The diesel engine will be able to run separately, or in conjunction with the electric motor for optimal power and energy efficiency.

Although Volvo is studying other alternative propulsion methods, it is bullish on plug-in electric technology.

Volvo, the Swedish subsidiary of Ford Motor Co., says PHEVs use far less electricity than most people believe.

“The fact is that a single medium-sized wind-power station can produce renewable electricity to cover the annual consumption of 1,000-2,000 (PHEVs) in normal use,” the auto maker says. “If 15% of Europe’s cars consisted of (PHEVs), this would mean that total electricity requirements would only increase by 1%-3%.”

Pricing has yet to be determined, although Volvo says the cost of the PHEV is “expected to be considerably higher than for a conventional diesel car since the batteries are still expensive.”

However, fuel costs on electric power will be only one-third compared with driving on diesel, Volvo says, noting “this partially compensates for the higher purchase price, although not fully.”

Volvo says PHEVs will be commercially viable for “certain customers” in 2012, and that the vehicles will “gradually” widen in appeal as battery price and performance improve.