Polestar announced on Thursday that the US Commerce Department’s Bureau of Industry and Security denied the company authorization to sell vehicles, starting with the 2027 model year, under the "Connected Vehicle Rule." This regulation, implemented in the final days of the Biden administration and maintained by the Trump administration, targets connected vehicle manufacturers owned or controlled by China or Russia, or vehicles using their software, due to national security concerns that these companies might be compelled to share data or allow remote access to vehicles in the US. Polestar is majority-owned by Chinese automaker Geely.
While Polestar will continue to sell its existing stock of Polestar 3 and Polestar 4 models in the US and support customers, the company stated it will now focus future sales growth in Europe, where it already generates 80% of its sales. Despite its Chinese ownership, none of Polestar's vehicles sold in the US are built in China, with the Polestar 3 manufactured in South Carolina and the Polestar 4 in South Korea. The company's CEO, Michael Lohscheller, indicated that this strategic shift reflects a new phase in the automotive industry characterized by regional dynamics.
Interestingly, Polestar's parent company, Geely, also owns Volvo, which received a waiver in May allowing it to continue selling cars in the US, despite similar ties to China. This disparity has caused frustration among Polestar's 32 US dealerships, which are now facing chaos as they attempt to wind down operations, manage existing inventory, and address service needs for current customers. Polestar will continue to operate in Canada, providing a North American testing ground should the brand ever return to the US market. The ban effectively means models like the Polestar 5 and 6 will not be released in the US in this decade without significant legislative changes.
