Polestar barred from U.S. sales under Connected Vehicle Rule

The U.S. Department of Commerce’s Bureau of Industry and Security denied Polestar authorization to sell new vehicles beginning with the 2027 model year, invoking the “Connected Vehicle Rule” that restricts import and sale of cars whose software or hardware is linked to China or Russia for national‑security reasons. Polestar, a Swedish EV brand majority‑owned by China’s Geely, will therefore cease new sales in the United States. The company will continue to sell its existing inventory of Polestar 3 and Polestar 4 models and keep its service network active for current owners. Volvo, Polestar’s sister brand, recently received a waiver, highlighting the distinction regulators made between the two. In response, Polestar is shifting its strategic focus to Europe, which already provides about 80 % of its retail sales and accounted for 94 % of global deliveries in Q1 2026. CEO Michael Lohscheller said, “Europe is our largest growth engine and we intend to build the Polestar 7 there.” The ban has pressured the brand’s share price and underlines growing geopolitical tension over connected‑vehicle technology.