The U.S. electric vehicle market is about to lose one of its well-known brands. Polestar announced that it will no longer be allowed to sell new vehicles in the United States starting with its 2027 model year.
The decision follows a ruling by the U.S. Commerce Department, which cited national security concerns under federal regulations covering connected vehicles.
While the company will continue supporting current customers, its long-term focus is expected to shift toward Europe.
Why Polestar Can No Longer Sell Future Models in the US
Polestar announced that the Commerce Department’s Bureau of Industry and Security denied the company authorization to sell vehicles beginning with the 2027 model year.
The decision follows the Connected Vehicle Rule. The Biden administration introduced the rule during its final days in office, and the Trump administration kept it in place.
The rule blocks connected vehicle manufacturers that China or Russia owns, controls, or directs. It also bans vehicles that use covered software from those countries.
According to the regulation, companies from China or Russia may have to share vehicle data or provide remote access to connected vehicles operating in the United States. US officials say this creates national security concerns.
Ownership Structure and Manufacturing Details
Polestar is majority owned by Chinese automaker Geely and its chairman, Li Shufu. Geely also owns Volvo, which received a waiver from the Commerce Department in May.
Despite its ownership structure, Polestar does not manufacture its US-bound vehicles in China. The Polestar 3 is produced at Volvo’s manufacturing facility in Charleston, South Carolina, while the Polestar 4 is assembled in South Korea.
Neither the US Commerce Department nor Geely provided an immediate response following requests for comment on the decision.
What the Decision Means for Polestar
The company stated that it will continue selling its existing inventory of the Polestar 3 and Polestar 4 in the United States. Current owners will also continue to receive customer support and access to Polestar’s service network.
China has become the world’s largest automobile producer and a leading exporter, especially in electric vehicles. High US tariffs have already limited Chinese automakers in the American market. Going forward, Polestar plans to focus on Europe, where about 80% of its sales already come from.
The Commerce Department’s decision will end Polestar’s future vehicle sales in the United States after the 2027 model year. Even so, existing customers will continue receiving service and support.
The company will now concentrate on expanding its business in Europe while US trade and national security policies continue to shape the electric vehicle industry.