Polestar Faces U.S. Sales Ban Under New Regulation Targeting China-Linked Automakers
In a significant shift for electric vehicle (EV) maker Polestar, a new regulation is set to halt its sales in the U.S. from the 2027 model year. This move stems from the Trump administration’s enforcement of rules targeting automakers with Chinese connections, raising concerns over national security.
The U.S. Commerce Department’s Bureau of Industry and Security (BIS) has denied Polestar the necessary authorization to continue selling its vehicles in the United States. The regulation, known as the Connected Vehicles Rule, imposes restrictions on importing and selling cars equipped with technology linked to China, including Bluetooth, wireless internet, and cellular connectivity.
The initiative was initially introduced by the Commerce Department in January 2025 at the tail end of the Biden administration and continues under President Donald Trump.
Polestar will face a sales ban in the U.S. starting with the 2027 model year due to the Connected Vehicles Rule. (Justin Sullivan/Getty Images)
CEO Michael Lohscheller of Polestar announced a strategic pivot towards Europe, highlighting that the company’s growth will primarily stem from this region. As stated, 94% of Polestar’s retail sales during the first quarter of 2026 were outside the U.S. Lohscheller commented, “Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe.”
He further noted the automaker’s success, saying, “Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches taking place in Europe this year. In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America, and Canada.”
GORDON CHANG WARNS CHINESE EVS ENTERING US VIA CANADA COULD BECOME ‘ROLLING SPY MACHINES’
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PSNY | POLESTAR AUTOMOTIVE | 17.43 | -1.54 | -8.12% |
| VLVLY | VOLVO AB | 33.25 | -0.51 | -1.51% |
Based in Sweden, Polestar is predominantly owned by China’s Geely Holding Co. The company has faced financial challenges, needing repeated investments from Geely, and experienced a significant drop in share prices, prompting a reverse stock split to maintain its Nasdaq listing.
Despite the impending sales ban, Polestar plans to sell its remaining stock of Polestar 3 and Polestar 4 models in the U.S. and will continue supporting these customers through an established service network.
INDUSTRY GROUP WARNS OF CHINESE CONNECTED VEHICLES
Most of Polestar’s retail sales have been in Europe. (Sjoerd van der Wal/Getty Images)
Volvo, a sister brand producing some of Polestar’s vehicles, announced earlier this year that it would consolidate production of the Polestar 3 at its South Carolina plant. It remains uncertain if the latest regulatory developments will alter these plans.
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Reuters contributed to this report.
Original Story at www.foxbusiness.com