Polestar Barred from U.S. Market Underneath Linked Car Rule

Polestar, the Swedish EV model owned by Chinese language automaker Geely, introduced Thursday that the U.S. Division of Commerce declined to grant it authorization below the Linked Car Rule, successfully barring the corporate from advertising or promoting new model-year 2027 automobiles in the USA.

The corporate mentioned it is going to proceed to promote present inventory of the Polestar 3 and Polestar 4 within the U.S.

In its official assertion, Polestar mentioned it “will proceed to assist clients, together with offering entry to its service community.”

Polestar’s Response: A Strategic Pivot

Polestar is characterizing its U.S. exit not as a compelled retreat however as an acceleration of a method already largely centered on Europe.

Mentioned CEO Michael Lohscheller within the assertion: “The automotive trade is coming into a brand new section, based mostly on regional dynamics. Our technique displays that, with Europe being our largest development engine and our plan to fabricate Polestar 7 in Europe. Our file gross sales in 2025 and the primary quarter of 2026 present that we’re making robust progress, with a number of new market launches happening in Europe this 12 months. As well as, we’ll proceed to spend money on markets the place now we have alternatives to proceed to develop, like Southeast Asia, Jap Europe, Latin America and Canada.”

Lohscheller additionally pointed to a full product pipeline as proof of the corporate’s broader well being: “Polestar continues to problem greater, extra established gamers because of our spectacular vehicles and rising mannequin line-up. Polestar 5 has acquired unbelievable suggestions from the worldwide media, with buyer deliveries set to begin in the course of the summer season. A brand new variant of our world bestseller, Polestar 4, is deliberate for the second half of this 12 months, adopted by the all-new Polestar 2 in 2027, and thereafter the Polestar 7 compact SUV.”

None of these fashions, below the present rule, will probably be out there to U.S. fleet consumers.

What Is the Linked Car Rule?

The Linked Car Rule, finalized in January 2025, bans linked automobiles with a “enough nexus” to China or Russia from the U.S. market, with software program prohibitions taking impact for mannequin 12 months 2027 and {hardware} restrictions following in 2030. It covers telematics, cameras, microphones, GPS, Bluetooth, mobile modules, and automatic driving software program throughout gasoline, hybrid, and electrical automobiles alike.

The argument is that Chinese language-linked automobile expertise — together with automated driving and connectivity techniques — poses a nationwide safety threat.

The rule additionally covers American-made fashions that use Chinese language software program, which means manufacturing unit location alone isn’t enough to safe authorization. That is a related consideration for fleet procurement groups evaluating automobiles from manufacturers with advanced world possession buildings.

The Polestar 3 is constructed at Volvo’s plant in Charleston, South Carolina, whereas the Polestar 4 is assembled in Busan, South Korea. Neither reality was enough to safe the corporate’s authorization.

Volvo Automobiles Granted Authorization

The Polestar resolution comes just some months after the Trump administration granted the identical authorization to Volvo Automobiles — Polestar’s sibling firm. Each automakers are publicly traded and function below Geely’s management, though Volvo Automobiles stays a separate listed firm whereas Polestar is majority managed by Geely-affiliated entities.

Volvo Automobiles operates as a extra established automaker with a bigger U.S. footprint, whereas Polestar is extra carefully tied to Geely’s broader company construction and shares automobile platforms and software program with different Geely manufacturers.

The Commerce Division has not publicly detailed the precise standards that differentiated the 2 outcomes.

Volvo introduced the exemption in a press assertion on Could 26:

“Underneath the rule Volvo Automotive USA was required to comply with a course of with the US Division of Commerce to acquire a particular authorization for the continued import and sale of linked vehicles within the US. The method is carried out on a case-by-case foundation and the issuance of a particular authorization follows constructive discussions with the US Division of Commerce and different US officers relating to Volvo Automobiles’ governance, expertise and knowledge safety.”

“With this particular authorization, Volvo Automobiles can proceed its development plans within the US.”