Key facts
- Polestar will cease U.S. sales starting with the 2027 model year.
- The U.S. Commerce Department denied Polestar an exemption to a rule restricting vehicles with Chinese-linked connected technology.
- The rule cites national security concerns related to data collection by vehicles.
- Polestar's majority owner is China's Geely Holding Group.
- Volvo, a sister brand also linked to Geely, received an exemption.
- Polestar will continue to provide after-sales support and service for existing U.S. owners.
Polestar will cease sales in the United States from the 2027 model year, following the U.S. Commerce Department's denial of its request for an exemption to the Connected Vehicle Rule. This regulation targets vehicles with software or hardware that has a significant connection to China, citing national security concerns related to data collection.
The rule, finalized in 2025, prohibits the sale of connected vehicles with Chinese links, impacting telematics systems, cameras, microphones, and automated driving software. Polestar's U.S. assembly plant in South Carolina and its Polestar 4 assembly in South Korea were not sufficient to bypass the restrictions.
The decision highlights the increasing use of technology trade controls in the economic contest between the U.S. and China. While Polestar, majority-owned by China's Geely Holding Group, was denied authorization, Volvo, which also has ties to Geely, received an exemption. This suggests regulators are making granular assessments based on specific supply chains.
Polestar had previously warned dealers of this potential outcome. The company announced it will halt U.S. sales once its current inventory is depleted and cancel the planned U.S. launch of two new models. However, Polestar stated it will continue to provide after-sales support for existing owners.