Volvo unveils Polestar 2, a fully electric rival for Tesla's Model 3

Feb. 27 (UPI) -- Swedish automaker Volvo on Wednesday unveiled its first fully electric vehicle, which the company hopes will compete with the Tesla Model 3.

Volvo showed off its Polestar 2, which has a starting price of $45,400 and a higher-end version for $68,200. The car has 400 horsepower and can go from 0 to 60 mph in less than five seconds.

The automaker said the Polestar 2 has a battery range of about 275 miles with a 78 kilowatt-hour battery that takes up the entire floor of the vehicle.

Its onboard system will be the first in the world to include Google's Android, which integrates mapping and digital assistance features, Volvo said. The car will be built in China and first models are expected to start selling next year. Volvo said it will start promoting the vehicle with a "road show" in March. The first Polestar was a plug-in electric-hybrid.

Volvo's announcement followed its recognition Tuesday from the Ethisphere Institute as the World's Most Ethical Company, for the third year in a row. Only four automakers made the list. The Ethisphere Institute advances ethical business practices.

"Responsible business is a fundamental part of our culture and our way of doing business," Volvo Sr. Vice President Maria Hemberg said.

Tesla's Model 3 starts at about $42,900 and has 260 miles of range. Tesla had promised it would start at $35,000, but it has yet to produce one at that price.

New competition from Volvo comes as Tesla is dealing with challenges at the fiscal and legal levels. It said last month it'll cut 7 percent of its workforce to trim costs to facilitate the Model 3. CEO Elon Musk is also at odds with the Securities and Exchange Commission for another inaccurate tweet about vehicle production. The SEC could find Musk in contempt of court for violating a settlement reached last year.

Complicating matters, Tesla faces a Friday deadline to pay bondholders $920 million because company stock failed to hit $359.87 before March 1. Shares haven't exceeded that level since mid-December. Tesla shares were valued at $306.91 when markets closed Tuesday.

Tesla's fourth quarter shareholder letter said it had "sufficient cash on hand to comfortably settle in cash our convertible bond that will mature" in March.