Key facts
- Polestar will halt U.S. sales after its current inventory is cleared.
- The decision stems from the U.S. Connected Vehicle Rule, which restricts vehicles with Chinese-linked technology.
- Polestar, majority-owned by Geely, was denied an exemption from the rule by the U.S. Department of Commerce.
- New Polestar models, including the Polestar 5 sedan and Polestar 6 roadster, will not be sold in the U.S.
- Volvo, also majority-owned by Geely, received an exception to continue selling its vehicles in the U.S.
- Polestar will continue to provide after-sales support for existing owners in the U.S.
Electric vehicle manufacturer Polestar is set to exit the U.S. market following the U.S. Department of Commerce's Bureau of Industry and Security's decision not to grant the company an exemption from the Connected Vehicle Rule. This rule, which took effect in March 2025, targets vehicles with hardware or software connected to China and Russia, impacting sales from the 2027 model year onwards.
Polestar, which is majority-owned by China's Geely Holding Group, announced it will halt U.S. sales once its current inventory is depleted. The company has canceled the planned U.S. launch of several new models, including the Polestar 5 sedan and Polestar 6 roadster. Despite the withdrawal from sales, Polestar has committed to continuing after-sales support for its existing U.S. customer base.
The decision comes as U.S. lawmakers aim to prevent Chinese-made vehicles from fully entering the country, citing national security concerns related to connected vehicle technology. Ironically, the Polestar 3 SUV is manufactured in South Carolina, and other Chinese-made vehicles are already present in the U.S. market. In contrast, Volvo, also majority-owned by Geely, secured an exception from the same rule in May, allowing it to continue its U.S. sales operations.
Polestar intends to shift its strategic focus, with Europe identified as its largest growth engine. The company plans to manufacture the Polestar 7 in Europe and will continue investing in markets such as Southeast Asia, Eastern Europe, and Latin America. This move reflects a broader trend of automotive industry dynamics becoming increasingly regionalized.