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  "description": "Polestar will stop selling new vehicles in the United States starting with the 2027 model year, after the US Department of Commerce's Bureau of Industry and Security declined to grant the Swedish electric vehicle brand an authorization to operate under",
  "path": "/news/polestar-us-exit-connected-vehicle-rule",
  "publishedAt": "2026-06-25T14:42:22+00:00",
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  "textContent": "Polestar will stop selling new vehicles in the United States starting with the 2027 model year, after the US Department of Commerce’s Bureau of Industry and Security declined to grant the Swedish electric vehicle brand an authorization to operate under the country’s Connected Vehicle Rule. The decision affects all Polestar products beginning with the 2027 model year, although the company will continue to sell existing 2026 model year inventory of the Polestar 3 and Polestar 4, and Polestar says it will continue to support existing US customers through its service network.\n\nFor current US Polestar owners, the immediate impact is limited. The company has been clear that warranty support, parts supply, and dealer-network service for vehicles already sold or sitting in dealer inventory will continue. The longer-term impact, however, is meaningful. New US Polestar customers will not be able to order 2027 or later model year vehicles, and Polestar’s footprint in North America will contract significantly as the remaining 2026 inventory is sold through. Polestar says the United States accounted for only about 6 percent of the company’s retail sales volumes in the first quarter of 2026, with roughly 94 percent of sales coming from markets outside the US.\n\nWhat the Connected Vehicle Rule is\n\nThe Connected Vehicle Rule is a regulation administered by the US Department of Commerce’s Bureau of Industry and Security that restricts the import or sale of connected vehicles containing certain hardware or software of Chinese or Russian origin. The rule was finalized in January 2025 by the outgoing Biden administration and took effect on a staggered timeline tied to model years. It is intended to address national security concerns related to data flowing from in-vehicle telematics, navigation, and driver-assistance systems back to entities in countries that the United States considers adversaries.\n\nPolestar is headquartered in Sweden but is owned by Geely Holding, the Chinese parent company that also owns Volvo and Lotus. That ownership structure has placed Polestar in the crosshairs of the Connected Vehicle Rule despite the company’s US manufacturing presence and Swedish engineering base. The Department of Commerce has not publicly detailed which specific software or hardware components in Polestar vehicles triggered the denial, although the rule generally targets connected vehicle systems, including telematics control units and automated driving systems, that involve significant Chinese-origin engineering or supply chains.\n\nPolestar had taken steps over the past two years to reduce its exposure under the rule. The Polestar 3 has been built in Charleston, South Carolina at the Volvo plant since 2024, with production fully consolidated there earlier in 2026. The Polestar 4 moved its production from China to South Korea, where Renault Korea Motors began building the vehicle for the US market in 2025. Those moves were intended to address the tariff and connected-vehicle issues that have been building for several years, but the Commerce Department’s denial of authorization under the Connected Vehicle Rule appears to be the determinative factor.\n\nWhat Polestar customers in the US need to know\n\nPolestar has been clear about three things. First, the company will continue to sell the existing stock of the Polestar 3 and Polestar 4 in the United States. That means current model year 2026 vehicles still in dealer inventory or in transit to dealers will remain available for purchase. New customers who want to buy a Polestar in the US still have time, though the inventory window will close as existing units are sold.\n\nSecond, Polestar will continue to support existing US customers, including through its dealer-service network. Polestar has a network of dedicated retail locations in major US metropolitan areas, and the company has indicated that those locations will remain open to service existing customers. Parts and software support will continue, although the company has not detailed how long that support window will extend.\n\nThird, new 2027- and later model-year Polestar vehicles will not be available in the United States. That includes the much-anticipated Polestar 5, the company’s flagship grand tourer, as well as any future versions of the Polestar 2, Polestar 3, Polestar 4, or Polestar 7 that fall under the 2027 model year or later.\n\nWhere Polestar goes from here\n\nPolestar is reframing the moment as a strategic pivot rather than a setback. Europe currently represents close to 80 percent of the company’s retail sales volumes, and Polestar said its focus going forward will be on expanding the European sales network, opening new markets in Eastern Europe, Southeast Asia, Latin America, and Canada, and preparing to localize manufacturing of the Polestar 7 compact SUV in Europe.\n\nThe product calendar Polestar reaffirmed in the announcement is consistent with the four-vehicle expansion plan the company laid out in February 2026. The Polestar 5 grand tourer is moving into customer deliveries this summer in international markets. A new variant of the Polestar 4 is planned for the second half of 2026. An all-new generation of the Polestar 2 sedan is scheduled for 2027. The Polestar 7 compact SUV will follow, with the company planning to build it in Europe.\n\nChief executive Michael Lohscheller framed the strategic shift as a response to what he described as a new phase in the automotive industry that is now organized around regional dynamics rather than a single global market. He said Polestar’s record sales in 2025 and through the first quarter of 2026 demonstrate that the underlying business is strong, and that the European-led strategy plays to the company’s strengths.\n\nWhat it means for the broader US EV landscape\n\nThe Polestar decision is one of the first major instances of the Connected Vehicle Rule being applied to a Western-domiciled manufacturer with Chinese ownership. Polestar’s situation is unusual because the brand sits at the intersection of Swedish engineering, Chinese ownership, and US manufacturing, but the precedent is meaningful for other automakers with similar structures. Several other Chinese-owned or Chinese-affiliated brands have either delayed or canceled US market plans over the past two years in response to evolving tariffs and connected-vehicle regulations, and the Polestar decision suggests that the Commerce Department is willing to apply the rule strictly, even when a brand has US production and a US-based dealer network.\n\nFor US consumers, the practical effect is fewer premium electric vehicle options. The Polestar 2, 3, and 4 have been credible alternatives to the Tesla Model 3, Tesla Model Y, BMW i4, BMW iX, and Mercedes-Benz EQE in their respective segments, and the loss of those products from the US market reduces the choice set in a category that has been adding rather than subtracting models. Existing Polestar owners can take some comfort in the continued service support, but resale values are likely to come under pressure as the brand winds down its US new-car operations.\n\nPolestar has not announced a specific shutdown timeline for its US retail operations or said how many additional 2026 model-year vehicles will be made available before inventory runs out. Customers considering a Polestar in the US should expect a narrowing availability window over the coming months.",
  "title": "Polestar will stop selling new vehicles in the United States after the 2026 model year",
  "updatedAt": "2026-06-25T14:42:23+00:00"
}