Police said there were four or five people in the car when it exploded yesterday afternoon in the district of Torslanda.
At least one of them was pronounced dead at the scene and another was taken to a hospital, police spokeswoman Camilla Fogelhamre said. She couldn't give details on other victims late yesterday, saying the police were still investigating the wreckage.
The local rescue service said there were multiple injuries and possible fatalities.
Rescue spokesman Bosse Andersson said the car exploded in a roundabout near a fire station. When rescuers from the fire station arrived at the scene they found the car demolished.
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"And I saw how, I think it was the roof, flew up in the air," he said. "It was a very strong blast."
Police questioned witnesses and cordoned off the area to allow experts to investigate the wreckage.
Located on the country's southwestern coast, Goteborg is Sweden's second largest city. It's seen a surge in violent conflicts between rival criminal gangs, including a restaurant shooting in March that left two people dead and about a dozen injured.