Polestar has been banned from US sales under a crackdown on China-linked cars
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Polestar said Thursday that the Trump administration is forcing the electric car maker to stop selling cars in the US starting with the 2027 model year under a new regulation that hurts automakers with ties to China.
The Commerce Department’s Bureau of Industry and Security (BIS) has refused to give Polestar permission to sell cars under the Connected Vehicles Rules, which ban the import and sale of cars with connected car technology in China starting next model year.
Bluetooth, wireless Internet, cellular communications and other satellite communications technologies are covered under regulations based on national security concerns stemming from the ability of those vehicles to collect sensitive data on American owners.
The Commerce Department first adopted the rule in January 2025 before the end of the Biden administration, and it is still active under President Donald Trump.
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Polestar will be banned from selling EVs in the US starting with the 2027 model year due to the Connected Cars Act. (Justin Sullivan/Getty Images)
Polestar CEO Michael Lohscheller said in a statement that the company will focus on Europe in its business strategy going forward, and the automaker’s announcement notes that 94% of sales in the first quarter of 2026 came from markets outside the US.
Lohscheller said “the automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our biggest growth engine and our Polestar 7 production plan in Europe.”
“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 for further growth, such as Southeast Asia, Eastern Europe, Latin America and Canada,” he added.
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| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| PSNY | POLESTAR ROADS | 17.43 | -1.54 |
-8.12% |
| VLVLY | VOLVO AB | 33.25 | -0.51 |
-1.51% |
Polestar, based in Sweden, is majority owned by China’s Geely Holding Co.
FOX Business has reached out to the Commerce Department and Geely for comment.
The company has struggled to turn a profit and needs repeated cash injections from Geely, and its shares have fallen sharply, leading it to undergo a reverse stock split last year to remain listed on the Nasdaq exchange.
Following the Commerce Department’s decision, Polestar will continue to sell existing stock of Polestar 3 and Polestar 4 vehicles in the US and support customers with access to its service network.
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Most of Polestar’s retail sales were in Europe. (Photos by Sjoerd van der Wal/Getty)
Volvo, which makes some of Polestar’s cars and is a related relative of the automaker, said in March it would consolidate production of the Polestar 3 at its plant in South Carolina instead of building it in China. It said it was too early to say whether Thursday’s announcement would change those plans.
The Polestar 3 is the company’s only model produced in the US.
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Reuters contributed to this report.
