Polestar Barred from U.S. Market Under Connected Vehicle Rule

On June 25 2026 the U.S. Department of Commerce’s Bureau of Industry and Security denied Polestar an authorization to sell new vehicles in the United States beginning with the 2027 model year. The denial invokes the “Connected Vehicle Rule,” a regulation that prohibits the import or sale of connected-vehicle hardware or software owned, controlled, or directed by China or Russia. The rule, adopted in January 2025 under President Joe Biden and retained by the Trump administration, targets Bluetooth, Wi-Fi, cellular and satellite communications that could enable remote data access.

Polestar faces US sales ban for new models from 2027

The rule expands earlier tariff measures on Chinese electric-vehicle imports. It aims to prevent “companies from these countries may be compelled to share data or allow remote access to connected vehicles in the United States.” (BIS notice). While the rule applies to any foreign-controlled technology, it has become a tool in a broader U.S. effort to limit Chinese automotive influence, including proposed legislation to bar Chinese manufacturers from building cars on U.S. soil.

Polestar faces US sales ban for new models from 2027

Polestar is a Swedish-registered brand majority-owned (?55 %) by Zhejiang Geely Holding Group, the same Chinese conglomerate that controls Volvo Cars. Geely’s chairman Li Shufu oversees both brands. Polestar’s chief executive is Michael Lohscheller. Volvo received a separate exemption in May 2026, whereas Polestar’s request was rejected, a discrepancy that officials have not explained.

Polestar Banned From Selling New Cars in the US from 2027

U.S. sales accounted for roughly 6 % of Polestar’s first-quarter 2026 retail volume, while 94 % of global sales originated outside the United States. The ban triggered a 5.7 % drop in Polestar’s Nasdaq share price on the day of the announcement. In 2023 the brand delivered 12,215 vehicles in the U.S., but recent figures show a steep decline. The company plans to concentrate on Europe, which already supplies about 80 % of its total sales, and to launch new models—including the Polestar 7 SUV—in that market.

Polestar forced to stop US sales due to new ban on Chinese software, Australia unaffected

Polestar announced it will continue selling existing inventory of the Polestar 3 (built at Volvo’s Charleston, South Carolina plant) and Polestar 4 (imported from South Korea) and will maintain service support for current owners. The firm also said it will “focus on Europe as our largest growth engine.” The U.S. Commerce Department declined to comment on the denial. The Bureau of Industry and Security reiterated that the rule “prohibits sales of connected vehicles by manufacturers owned, controlled, or subject to the jurisdiction or direction of China or Russia.”

CNNPolestar Banned From Selling New Cars in the US from 2027Polestar forced to stop US sales due to new ban on Chinese software, Australia unaffectedPolestar Blocked From Selling New EVs in US by Trump Rule

Analysts note that the rule’s broad language could affect non-Chinese manufacturers, raising questions about proportionality and market access. The differing treatment of Volvo and Polestar—both Geely-controlled—highlights an opaque exemption process. Critics argue that the policy may accelerate fragmentation of the global auto market along geopolitical lines.

CNN

Sources differ on the exact criteria used to grant Volvo’s exemption while denying Polestar’s, despite identical ownership structures. Additionally, some reports list the Polestar 2 as China-built, whereas the U.S. market currently sells only the Polestar 3 and 4, built in the United States and South Korea respectively. The timeline for hardware restrictions also varies: the rule blocks new model sales from 2027, but hardware components are slated for restriction from model year 2030 (or January 1 2029 for non-model-year parts).

Polestar faces US sales ban for new models from 2027

• “Companies from these countries may be compelled to share data or allow remote access to connected vehicles in the United States,” — Bureau of Industry and Security notice

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• “The automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe,” — Michael Lohscheller, CEO, Polestar

Polestar has been banned from selling its cars in the US

• “Polestar Australia will continue to operate as normal; the overnight decision to cease sales of MY27 vehicles in the US will have no impact on the local market here,” said Polestar Australia managing director Scott Maynard in a statement.” — Scott Maynard, Managing Director, Polestar Australia

Polestar forced to stop US sales due to new ban on Chinese software, Australia unaffected

• “Former US President Joe Biden described modern vehicles as ‘smartphones on wheels’ and highlighted potential risks associated with access to vehicle data and connectivity with critical infrastructure.” — Joe Biden (quoted in regulatory commentary)

Polestar faces US sales ban for new models from 2027

• “The US is important because obviously it’s a big market.” — Michael Lohscheller, CEO, Polestar

Polestar forced out of America as Washington’s China tech ban claims its first carmaker

• “The Connected Vehicle Rule thus complements the USA’s existing trade barriers against Chinese vehicle manufacturers.” — Industry analysis (Electrive)

Polestar faces US sales ban for new models from 2027

Polestar will honour service obligations for existing U.S. owners while redirecting development and marketing resources to Europe, Southeast Asia, Eastern Europe, Latin America and Canada. The company remains “in good dialogue with authorities” about a possible exemption, but no timeline has been provided. Future U.S. policy could tighten hardware restrictions from 2030, potentially limiting any remaining Chinese-linked automotive supply chains.

Reuters