On the Dash:
- The Commerce Department denied Polestar authorization under the Connected Vehicle Rule, blocking new U.S. sales from the 2027 model year forward.
- Polestar will sell off its remaining Polestar 3 and Polestar 4 stock and keep servicing current owners through its existing network.
- The brand will redirect its growth to Europe, which already drives close to 80% of its retail sales.
Polestar will stop selling new vehicles in the U.S. starting with the 2027 model year. The Swedish electric-car brand said the U.S. Department of Commerce’s Bureau of Industry and Security declined to grant it authorization under the current Connected Vehicle Rule. The decision blocks new Polestar sales in the U.S. from model year 2027 onward.
Polestar is majority-owned by China’s Geely Holding, the same parent company as Volvo. Volvo secured its own U.S. authorization in May to keep selling vehicles under the rule.
Polestar said it will keep selling existing U.S. stock of the Polestar 3 and Polestar 4. It will also continue to support customers, including access to its service network.
The brand is now turning its attention to Europe. That market already accounts for close to 80% of Polestar’s retail sales volumes. The company said it will expand its European sales network and prepare to localize manufacturing of future models. Polestar reported that 94% of its first-quarter 2026 retail sales came from markets outside the U.S.
“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,” said Michael Lohscheller, CEO of Polestar, in a statement released by the company.
The Connected Vehicle Rule restricts the sale of cars tied to China or Russia over national security concerns. CBT News has tracked the policy since the Commerce Department first signaled plans to ban Chinese tech in connected cars. Automakers spent early 2026 racing to strip Chinese software from their vehicles ahead of the compliance deadline.
Lawmakers have moved to tighten the restrictions further. Senators introduced a bipartisan bill to ban Chinese connected vehicles in May. House members followed with a measure to permanently bar Chinese automakers from the U.S. market.
Polestar lists four current models, the Polestar 2, 3, 4, and 5. The brand sells cars in 31 markets across North America, Europe, and Asia Pacific. It plans to add a new Polestar 4 variant later in 2026 and a Polestar 2 successor in early 2027.
