Nope, it takes gas, it has an I-5 engine with a turbocharger.
It also looks much prettier than the regular 850, IMO.
The Turbo is a necessity on Long Island due to the Southern/Northern State parkways, they were made in the 30's and have VERY short entrance ramps. We had a Volvo 740GL station wagon, 1990 model year, with an I-4 engine and no Turbo and it was like playing chicken. The sedans we looked at were better but not by enough.
That fucker was 14 years old, and had 270K miles on it before we sold it to car cash in practically mint condition, interior included. The engine was amazing - always under super-high revvs and never needed any servicing.
Also, the fact that the 850 line is ahead of it's time safe, is a major selling point for me. I'm talking side curtain airbags here. First thing I would do after buying it - install them myself after meticulously reading them up online. Because dealer servicing is a bitch.
The 850 Turbo's only real flaw is a typical of Volvo rough ride...