Polestar denied authorization to sell EVs in US from 2027
Polestar will no longer be allowed to sell its electric vehicles in the United States for model year 2027 and beyond after the federal government denied the company's request for authorization under a new rule banning vehicles with software from China. The decision, announced by the company on June 29, 2026, follows a ruling by the Department of Commerce's Bureau of Industry and Security that blocks Polestar from selling vehicles from model year 2027 onward under the Connected Vehicle Rule.
Connected Vehicle Rule targets Chinese software
The Connected Vehicle Rule, passed under the Biden administration, prohibits the import and sale of any vehicle with software from “countries of concern,” including China. The regulation covers all components that connect a vehicle to the outside world, such as Bluetooth, Wi-Fi, cellular, and satellite systems. It also addresses concerns that technologies like cameras, sensors, and onboard computers could be exploited by foreign adversaries to collect sensitive data about US citizens and infrastructure. Additionally, the rule bans China from testing its self-driving cars on US soil.
Polestar owned by Chinese automaker Geely
Polestar is owned by Geely, one of the largest automakers in China. The company had been preparing for the rule to take effect for more than a year. In January 2025, Polestar predicted it would have to pull out of the US if the rule went into effect. The Polestar 3 is manufactured at the automaker's factory in South Carolina, while the Polestar 4 is assembled in South Korea. Despite US production, the software components sourced from China triggered the ban.
Existing customers to receive continued support
Polestar will continue to sell its existing stock of vehicles to US customers but will stop marketing and sales of vehicles from model year 2027 onward. “Supporting our customers remains our highest priority,” spokesperson Michael Ofiara said in a statement. “Existing Polestar owners and lease customers will continue to receive the same level of support and access to service as they do today. All existing warranties remain in effect and will continue to be honored in accordance with their terms and conditions.”
Polestar shifts focus to Europe and other markets
Polestar announced it would redouble its efforts in Europe, which already accounts for 80 percent of the company's sales. “The automotive industry is entering a new phase, based on regional dynamics,” Polestar CEO Michael Lohscheller said in a statement. “Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe. Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches taking place in Europe this year. In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America and Canada.”
Volvo granted exemption despite Geely ownership
Not every automaker linked to China is being pushed out. Volvo, which is also majority owned by Geely, was recently granted authorization to continue selling its vehicles in the US. The distinction highlights the specific focus of the Connected Vehicle Rule on software content rather than ownership structure.
