Polestar 3: Test Drive Review The Swedish automaker, owned by the Chinese Geely Group, will not be allowed to sell EVs in the U.S. model year 2027 onward.
The U.S. has denied Polestar authorization to sell electric vehicles in the country model year 2027 onwards.
That effectively marks the exit of the Swedish automaker from America.
The Polestar 3 is assembled in the U.S., whereas the Polestar 4 is made in South Korea.
Polestar, the EV maker owned by China’s Geely Group, will no longer be able to sell new vehicles in the U.S., it said on Thursday. The U.S. Department of Commerce denied the company an authorization under the Connected Vehicle Rule, which takes aim at cars with Chinese tech.
The Swedish automaker will continue to sell the remaining U.S. inventory of the Polestar 3 SUVs and Polestar 4 crossovers, and support existing customers through its service network. But no new 2027-model-year EVs will come to America.
“We will continue to sell current stock, just as today,” a Polestar spokesperson told InsideEVs in an email. “Moving forward, customers will enjoy the same access to service stations and customer service, but from MY 2027 onwards, we will stop marketing and sales of our cars in the U.S.”
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The Connected Vehicle Rule, which restricts vehicles with software and hardware linked to foreign entities of concern—such as China—has become a major barrier for automakers with Chinese manufacturing ties. The rule was finalized by the waning days of the Biden administration and prohibits the sale of vehicles with Chinese-linked software starting with the 2027 model year. Hardware restrictions come into play later, in 2030. The argument is that Chinese-linked vehicle technology—like automated driving and connectivity systems—pose a national security risk.
Before the ban, Polestar had built up a manufacturing presence outside of China. The Polestar 3 is assembled in the U.S. at Volvo Cars’ factory in Charleston, South Carolina, whereas the Polestar 4 is made in Busan, South Korea, at a Renault-owned facility. Volvo, which is also majority owned by Geely, was recently granted special authorization to skirt around the rule and continue selling connected vehicles in the U.S.
The automaker, however, is framing the exit as a strategic pivot rather than a retreat. The company says Europe already accounts for close to 80% of its retail sales, and that figure climbed to 94% in the first quarter of this year, factoring in markets outside the U.S. as well.
“The automotive industry is entering a new phase, based on regional dynamics,” Polestar CEO Michael Lohscheller said in a statement. “Our strategy reflects that, with Europe being our largest growth engine, and our plan to manufacture Polestar 7 in Europe. We will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America, and Canada.”