Polestar barred from selling new vehicles in US from 2027

Polestar will be unable to sell new vehicles in the United States from the 2027 model year after the US Department of Commerce denied the electric vehicle maker authorisation under the country’s Connected Vehicle Rule.

The ruling by the Bureau of Industry and Security means the Geely-owned Swedish EV brand cannot sell new vehicles in the US from the 2027 model year onwards over national security concerns relating to the Connected Vehicle Rule.

The decision comes despite Polestar moving production of its Polestar 3 SUV from Chengdu, China, to Volvo’s factory in South Carolina in an effort to avoid US tariffs. However, the Connected Vehicle Rule focuses on software and ownership links rather than manufacturing location.

Polestar says it will continue selling existing stocks of the Polestar 3 and Polestar 4 in the United States while maintaining its service network for existing customers. The company has also confirmed it will not appeal the decision.

The ruling does not affect Volvo Cars, which is also majority-owned by Geely but was granted authorisation by US authorities to continue selling vehicles under the Connected Vehicle Rule, subject to compliance with the regulations.

Polestar chief executive Michael Lohscheller says the company will instead increase its focus on Europe, where it has seen strong sales growth.

“The automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe,” Lohscheller says.

He says Polestar will also continue investing in growth markets including Southeast Asia, Eastern Europe, Latin America and Canada while pressing ahead with its future product plans, including the Polestar 5, a new variant of the Polestar 4, an all-new Polestar 2 due in 2027 and the Polestar 7 compact SUV.