Polestar says US rules will force it to end sales in 2027

Polestar said the Commerce Department’s connected-vehicle rule will force it to end U.S. sales starting with the 2027 model year after federal officials denied the company authorization to keep selling in the market. The immediate hit showed up in trading, with Polestar shares falling 5.7% in early trading, even as the company said it would continue selling existing Polestar 3 and Polestar 4 inventory in the United States and keep supporting its service network.

The rule at issue was finalized by the Commerce Department’s Bureau of Industry and Security on January 14, 2025. It phases in restrictions on software-related systems for model year 2027 and hardware-related systems for model year 2030, targeting connected vehicles and related technology linked to China or Russia. BIS said the policy responds to national-security risks when foreign adversaries could gain access to vehicle data or remote-control systems through Bluetooth, Wi-Fi, cellular and some satellite communications tools that are now built into modern cars.

For Polestar, the problem is not only the technology in the vehicle but also the company’s ownership structure. Polestar is majority-owned by Geely Holding, the Chinese automaker group, which puts it squarely inside Washington’s effort to limit Chinese-linked influence in a sector that now includes software, data and remote access alongside batteries and motors. The company had warned as early as 2024 that the connected-vehicle rules could effectively block U.S. sales, even for cars assembled domestically, and the South Carolina-built Polestar 3 did not escape the restriction.

Polestar has said Europe now accounts for close to 80% of its retail sales volumes and that it is sharpening its focus there while preparing to localize future model production in that market. That shift underscores how a U.S. rule built around national security can reshape industrial strategy far beyond one showroom, pushing a premium EV brand to place more of its future in Europe while American buyers face fewer choices.

Polestar is not alone in confronting the new regime. Ford Motor and other automakers have also sought U.S. authorization for China-linked models under the same rule, suggesting the company’s case is part of a broader licensing squeeze rather than a one-off denial. For consumers, that can mean slower rollouts and fewer imported options; for automakers, it is becoming another test of whether the U.S. market can still accommodate foreign-linked EV brands that depend on connected software as much as on hardware.