US denies Polestar authorization to sell vehicles, citing China manufacturing

• The U.S. Commerce Department denied Polestar authorization to sell vehicles from model year 2027.
• The ban is part of a rule targeting connected cars with Chinese software or hardware.
• Polestar, majority-owned by China's Geely Holding, will continue selling current Polestar 3 and Polestar 4 models in the U.S.
• Polestar plans to manufacture its next model, the Polestar 7, in Europe.
• Europe is identified as Polestar's largest growth engine.

The U.S. Commerce Department has denied electric car maker Polestar authorization to sell vehicles in the United States from model year 2027 onward, effectively banning future sales. The Sweden-based company, which is majority-owned by China's Zhejiang Geely Holding, stated it will continue to sell its current stock of Polestar 3 and Polestar 4 SUVs and maintain access to its service network.

This decision aligns with U.S. efforts to restrict cars manufactured by companies with Chinese links and to bolster domestic automotive interests. Polestar CEO Michael Lohscheller indicated that the company's strategy is adapting to regional dynamics, with Europe identified as its largest growth engine and plans to manufacture the Polestar 7 in Europe.

Polestar has been focusing on European markets, with approximately 94% of its sales volume in the first quarter of 2024 originating from outside the U.S. The Polestar 3 SUV is currently manufactured in South Carolina at a Volvo plant, while Polestar 4s destined for the U.S. were built in South Korea, though much of Polestar's manufacturing is in China. The ban comes months after Volvo, also owned by Geely, received similar authorization.