Polestar says the Trump administration is forcing it to stop selling vehicles in the US starting with the 2027 model year, the latest move in Washington’s crackdown on Chinese-linked cars, Reuters reports.
Polestar’s stock dropped 6.3 per cent on the Nasdaq Thursday after the news broke.
According to Reuters, the Commerce Department denied Polestar authorization under the Connected Vehicles Rule, which blocks cars with connected tech tied to China, things like Bluetooth, Wi-Fi, cellular, and some satellite communication, over concerns about that tech collecting sensitive data on American owners. The rule was adopted under Biden in January 2025 and has stayed in place under Trump.
Polestar, based in Sweden but majority-owned by China’s Geely, will keep selling its existing Polestar 3 and Polestar 4 in the US and won’t appeal the decision. CEO Michael Lohscheller said the company saw this shift coming.
“The automotive industry is entering a new phase, based on regional dynamics,” Lohscheller said. “Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe.”
That pivot tracks with the numbers Reuters cites: only 6 per cent of Polestar’s first-quarter sales came from the US, versus 78 per cent from Europe. The company has also struggled to turn a profit and needed repeated capital injections from Geely.
Ford and other automakers are now scrambling for similar US authorization, Reuters notes. Polestar’s sister brand Volvo Cars already secured its own approval in May. The ruling also raises questions about the Polestar 3, the brand’s only US-built model, production of which Volvo said in March it would consolidate at its South Carolina plant.
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