why do volvo discontinued the S80 V8?

The trend in Europe now is for smaller engines, with Turbo charge. The V8 is an expensive engine to build and has high energy consumption. Most of the manufacturer are shifting now to V6-Turbo and even 4 cylinders + Turbo, even for high end sedans. Better fuel efficiency, and lower cost as the same engine can be use in all model range with different power outputs.

When FORD motor company owned VOLVO CARS their engineers decided to put in the YAMAHA V-8 engine in an AWD platform to compete with the AUDI QUATTRO AND MB 4MATIC . It sold well for a few years while gas was cheap in America and in the Middle East.. However outside of those 2 markets it didn't sell well . Different engines occupy the s80 shell now even in Europe versus the USA. In Europe the cars is available with a D5 engine and only a 3.0L engine... In the USA 3.2L and the T6 engines are available. As gasoline increases in cost [in the USA] who is to say the diesel platform won't cross the shores to the USA. ..

Not enough sales. The mpg is only about 16/25 while its competitors surpassed that. If a car or engine production becomes halted if it doesn't compete practically therefore there aren't enough sales.