The V50 T5 AWD featured all-wheel drive and a straight-5 2.5 litre petrol engine, with a light pressure turbocharger, four valves per cylinder and a DOHC design with variable camshaft timing — providing 220 PS (162 kW; 217 hp) and 320 N⋅m (236 lb⋅ft) of torque.

Within the United States, Volvo limited sales of the V50 PZEV cars to states where it was required, including California, Florida, Vermont, Connecticut, Arizona, Maryland, Massachusetts, Pennsylvania, New York, Oregon, Maine, New Jersey, Rhode Island, New Mexico and Washington.

[6] Volvo Cars Special Vehicle produced a concept car based on the V50, the V50 SV, whose engine produces 340 hp (254 kW), and debuted at the 2004 Specialty Equipment Market Association trade show in Las Vegas, Nevada.

[citation needed] For the model year of 2008, the V50 received revised front styling, minor modifications to the interior, optional active xenon headlights, audio systems, increased power and torque of the T5 engine, availability of the D5, with a six speed manual and a 1.8 Flexifuel engine.

In 2010, the new, larger, circular Volvo logo appeared on the front grille, in the United States, a manual transmission was briefly available with the T5 AWD version.