US blocks Polestar’s future sales over China-linked car tech

The tides can often change very quickly in the automotive world. That’s exactly what has happened with Polestar, which has just been banned from selling its cars in the US market by the country’s Commerce Department.

The Swedish company confirmed the news by announcing that it couldn't secure an agreement with the US government to continue sales of its new vehicles in the US. The latest development follows Polestar's announcement of record sales, with 13,126 cars sold, representing 7% year-on-year growth.

The Connected Vehicle Rule, finalized in 2025 under the Biden Administration, effectively blocks Polestar from selling cars in the US starting with the 2027 model year. The rule targets connected vehicles with software or vehicle-connectivity hardware linked to China or Russia, and also applies to automakers owned by, controlled by, or subject to the jurisdiction of those countries. As you may know, the Swedish EV brand is majority-owned by Geely – a Chinese auto manufacturer – which puts them on the wrong side of the Connected Vehicle Rules. Cars like the Polestar 2, 4, and the new Polestar 5 are all manufactured in China, which means none of them can be sold in the USA.

The rule was motivated by national security concerns. Apparently, cars from countries like China, Russia, and others were deemed to pose a risk to US security. The argument was that tech like cameras and GPS tracking in cars could be exploited by foreign powers.

That has prevented companies like WeRide and Pony AI from testing self-driving cars on US roads. The said Rule also prohibits Chinese software in cars sold in the US beginning with the 2027 model year, with a further ban on Chinese hardware from the year 2029 as well.

While the move to ban Polestar has raised eyebrows, there’s an even bigger concern that's received a lot of attention. People are questioning why others like Volvo, which is in fact Polestar's sister brand, and Ford Motor, which imports its Lincoln Nautilus from China, have been given the benefit of the doubt in this situation.

"It just doesn't make sense how some brands could get a green light, and we got a red light," remarked Matthew Haiken, one of the first and biggest Polestar dealers in New Jersey.

Dig deeper, and you’ll realize that Volvo's connected cars are powered by European data infrastructure. Meanwhile, Polestar depends on Geely's servers in China. Not to discount Volvo's far greater presence in the US, which may have given it more negotiating power.

As for others like Ford, we also know now that the company is currently in talks with the Commerce Department for authorization to continue importing the China-built Lincoln Nautilus on the grounds that even though Nautilus' software is installed in China, it is developed in the US.

But for Polestar, it looks like its time in the USA is up. The company, however, was quick to point out that it would continue to sell its existing stock of Polestar 3 and Polestar 4 crossovers until US stocks run out. Additionally, it would continue giving US customers access to its service network and support.

The brand’s US lineup ranged from the 2 fastback sedan – offered with single- and dual-motor powertrains producing up to 476 hp in Performance Pack guise – to the newer Polestar 3 electric SUV and the sleek Polestar 4 SUV-coupé. Together, these cars showcased the Swedish marque's push into the premium electric vehicle (EV) space with features such as 400-V and 800-V electrical architectures, long-range battery packs, over-the-air software updates, Google-built infotainment, and performance credentials that positioned them up against rivals from Tesla, BMW, Audi, and Mercedes-Benz.

Whether this move is seen as a win in the case of national security concerns or purely to target Chinese goods is secondary. What it does is leave the consumer with one less EV option in the market.

Source: Polestar