Electric car company Polestar is pulling out of the US market, but not by choice. Regulations established by the US Government are cracking down on companies with ties to China, and the Swedish automaker certainly has some with its Chinese ownership. In short, the regulations prohibit automakers from selling vehicles in the US if China is a factor.
There is a process to request special authorization for US sales, which Polestar filed. But the feds denied it. That means Polestar cannot sell cars in the US starting from model year 2027, which will effectively ban it despite it building its best-selling vehicle at a plant in the US. What does this mean for the brand going forward?
Everyone’s Second Third Fourth Favorite Swedish Automaker Banned From America
2026 Polestar 4 at 2026 SAE World Congress Experience in DetroitTom Murphy / CarBuzz / Valnet
The official announcement from Polestar says that it is “increasing its strategic focus on Europe.” The decision is the result of the US Department of Commerce denying it an authorization to sell vehicles in the US under the current Connected Vehicle Rule.
Near the end of the Biden Administration’s term, a new rule was implemented that was meant to block the sale of vehicles from Chinese manufacturers. It was intended to be a crackdown on connected vehicle software and hardware, and the stated goal was for national security. The rule was kept by the Trump Administration, and blocks vehicle manufacturers with Chinese ownership from model year 2027.
Both Volvo and Polestar, owned by Chinese company Geely, were affected despite having US production. In May, Volvo was granted a specific authorization by the US that allowed it to keep selling its vehicles in the US. Polestar, it just announced, was not.
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Polestar will continue selling existing stock of the Polestar 3 and Polestar 4 EVs. The company said in a statement that it will continue to support its customers, and that includes “providing access to its service network.”
Automaker Will Focus On Europe, Asia, Other Markets
Polestar 4. EV. All-electric. e-Crossover. Side profilePolestar
“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,” said CEO Michael Lohscheller. “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.” While the US has traditionally been the number one or number two auto market in the world, only 6% of Polestar’s Q1 sales were in the US.
The automaker might not be that sad to go. Those 6% of total sales have been a huge expense for the brand in terms of discounts. Currently, the Polestar 3 SUV is being offered with up to $22,000 in total discounts, while the Polestar 4 offers up to $14,000. While those figures are huge on vehicles with MSRPs between $67,000 and $80,000, they are not new discounts implemented as a result of the news. We’ve actually seen discounts this large before from the brand.
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Polestar 3 production will move exclusively to Volvo’s South Carolina plant to “drive efficiencies.”
Polestar began as a Volvo racing team before being brought in-house in 2015. It announced plans to build its own vehicles in 2017, and the Polestar 1 PHEV was the first of those when it went on sale in 2019. Its first US retail stores opened in the second half of 2020.
CarBuzz Insight – Why This Matters:
2025 Polestar3 Long Range Dual Motor driving front 3/4 angle in grayPolestar
Polestar sold approximately 5,400 vehicles in the US last year, down from 13,000 the year before, so it was clearly already struggling. But it’s a surprise to see Volvo get government approval, but not Polestar, which has very similar ownership and uses much of the same software and hardware.
This could be worrying for other automakers that have yet to secure authorization for their Chinese production. Both Buick and Lincoln are waiting for approval for popular models. The Polestar announcement could be a sign that they won’t get it, which would be a big blow for both.
It’s also concerning for current owners, because even if Polestar service centers stick around for the duration of its warranty obligations, they could have trouble getting parts. It could also mean serious trouble finding specialized service for long-term owners.
Source: Polestar
