Polestar will stop selling new model year 2027 vehicles in the United States after the Department of Commerce denied the electric vehicle manufacturer authorisation under federal connected-car regulations.
The Swedish company, which is majority-owned by China’s Geely Holding, can continue selling its existing US inventory of Polestar 3 and Polestar 4 vehicles. It will also maintain service and customer support for cars already on the road.
Connected Vehicle Rule Restricts Chinese Technology
The decision was made under the US Connected Vehicles Rule, which limits the import and sale of vehicles containing certain software and hardware linked to China or Russia.
The regulations cover technologies that connect cars to external networks, including cellular, satellite, Wi-Fi, and Bluetooth systems. US officials have argued that connected vehicles could collect sensitive information about drivers, infrastructure, and travel patterns or provide foreign governments with remote access to critical systems.
Restrictions on covered software apply from model year 2027, while hardware requirements will take effect later. Companies affected by the rule can apply to the Commerce Department for specific authorisation to continue selling vehicles.
Polestar submitted such a request but was not approved. The company confirmed the decision in an official announcement, saying it would increase its strategic focus on Europe.
Existing Inventory Can Still Be Sold
The restriction does not require Polestar to withdraw vehicles already available in the United States. Dealers can continue selling current stocks of the Polestar 3 and Polestar 4, although the company will not introduce new 2027 model year vehicles unless its regulatory position changes.
The Polestar 3 is assembled at a Volvo factory in South Carolina, while US versions of the Polestar 4 are produced in South Korea. However, the rule also considers ownership, software development, maintenance, and supply-chain relationships rather than only the location of final assembly.
Polestar said 94% of its retail sales volume during the first quarter of 2026 came from outside the United States. Europe already accounts for most of its business, reducing the financial impact compared with a manufacturer that relies heavily on American sales.
Volvo Received Separate Approval
The decision contrasts with the treatment of Volvo Cars, another Swedish automaker controlled by Geely. The Commerce Department granted Volvo a specific authorisation in May, allowing it to continue importing and selling connected vehicles in the United States.
The department does not publicly disclose the full details of individual applications or explain why one manufacturer receives approval while another does not. Volvo said its authorisation followed discussions about its governance, technology systems, data security, and compliance arrangements.
Polestar said it will now place greater emphasis on Europe while continuing to operate in markets including Canada, Latin America, and parts of Asia.
Featured image credits: Wikimedia Commons
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