Electric vehicle maker Polestar will stop selling new cars in the United States after the company failed to obtain government approval under new rules restricting Chinese-linked technology in connected vehicles. The decision makes Polestar the first major automaker forced to leave the US market under the policy, which Washington says is aimed at protecting national security.
The Swedish electric vehicle brand, which is controlled by China’s Zhejiang Geely Holding Group, confirmed that the US Commerce Department had rejected its request to continue selling vehicles under a waiver process established by the regulations. The department has not publicly commented on the decision.
Polestar said it would continue selling its remaining inventory in the United States while maintaining service and repair support through its existing dealer network, ensuring current owners continue to receive maintenance and warranty coverage.
The restrictions stem from the US government’s connected vehicle regulations, introduced during the previous administration and retained by the current White House. The rules prohibit the sale or import of vehicles containing software or hardware linked to Chinese companies, citing concerns that internet-connected systems such as cameras, microphones and GPS technology could present security risks.
Automakers were required to certify by March this year that their vehicles did not contain software developed in China or by Chinese firms, or seek special authorization to continue selling affected models from the 2027 model year onward.
The ruling has created different outcomes within the Geely group. Volvo, which is also majority-owned by Geely, secured approval from US authorities in May after discussions regarding its technology and data security measures. Polestar, despite following the same review process, was denied permission.
The decision comes as Washington continues tightening restrictions on Chinese-owned automotive companies. US lawmakers are also considering additional legislation that would prevent Chinese manufacturers from producing vehicles inside the United States.
Polestar had previously expressed confidence that it would receive approval. Chief Executive Michael Lohscheller recently said the company was engaged in productive discussions with US authorities, describing the American market as strategically important.
Originally established as Volvo’s performance division, Polestar became an independent electric vehicle brand in 2017 before listing publicly in 2021 during the rapid expansion of the EV industry. Its lineup initially included the Polestar 1 hybrid coupe and the Polestar 2 electric sedan, which competed directly with Tesla’s Model 3.
Trade tariffs imposed on Chinese-built electric vehicles had already forced the company to remove the China-built Polestar 2 from its US lineup. More recently, Polestar has sold the Polestar 3, assembled in South Carolina, and the Polestar 4, produced in South Korea.
Following its withdrawal from the US market, the company said it will focus on strengthening its position in Europe, where about 80% of its global sales are generated. The move reflects growing divisions in global automotive trade as governments adopt different approaches toward Chinese investment and technology in the electric vehicle sector.
