Polestar, the Swedish electric vehicle brand with deep ties to China’s Geely Holding, has been told by the U.S. Department of Commerce’s Bureau of Industry and Security that it will not be allowed to sell 2027 model year and newer vehicles in the United States under the federal Connected Vehicle Rule.
That does not mean every Polestar suddenly disappears from America, and it does not mean current owners are stranded on the side of the road with a very expensive Swedish paperweight. Polestar says it will continue to sell existing stock of the Polestar 3 and Polestar 4 in the U.S., and the company says it will continue to support customers, including access to its service network. That is the good news, such as it is.
The bad news is that, as things stand now, Polestar cannot sell 2027 model year and newer vehicles here unless something changes with the federal government’s position.
The issue is not crash safety, emissions, recalls, battery fires, or whether Americans are ready to buy another electric vehicle with no rear window. The issue is national security and connected-vehicle technology. Modern vehicles are rolling computers. They collect data, communicate through Bluetooth, Wi-Fi, cellular connections, and in some cases satellite technology. Federal officials have been concerned for some time that vehicles tied to China or Russia could potentially collect sensitive information on American drivers, locations, infrastructure, or allow remote access to vehicle systems.
The Connected Vehicle Rule was adopted in January 2025 under the Biden administration and has been kept in place under the Trump administration. It applies to passenger vehicles under 10,001 pounds and begins with model year 2027 for covered software. The rule prohibits sales of connected vehicles by manufacturers owned by, controlled by, or subject to the jurisdiction or direction of China or Russia, and also restricts vehicles using covered software from those countries.
That is where Polestar runs into trouble. Polestar is headquartered in Gothenburg, Sweden, but it is majority-owned by China’s Geely Holding. According to Polestar’s own June 25 statement, the Commerce Department’s Bureau of Industry and Security declined to grant Polestar authorization under the current Connected Vehicle Rule to sell vehicles in the U.S. from model year 2027 onward.
One important point: this is not simply about where the vehicle is assembled. The Polestar 3 is built in South Carolina, and the Polestar 4 for the U.S. is sourced from South Korea, but the rule is aimed at corporate control, software, hardware, and connected-vehicle systems. In other words, moving final assembly out of China does not automatically solve the problem.
There is also an obvious head-scratcher here. Volvo, which is also owned by Geely, received a specific authorization from the U.S. government in May to keep importing and selling connected vehicles in America. Volvo said that approval followed discussions with U.S. officials about governance, technology, and data security. Polestar did not get the same green light, and that is going to leave dealers and current owners with plenty of questions.
Reuters reported that Polestar said it would not appeal the denial. That makes this very close to final for practical purposes, but it is not a court ruling in the traditional sense. It is an administrative decision under a federal rule that is already final and already in effect. Could the U.S. government later change the rule, grant a new authorization, or alter how it applies the standard? Yes, theoretically. But as of now, Polestar’s path for selling 2027 and newer vehicles in the United States is blocked.
Polestar appears to be taking the hint. The company says it is increasing its strategic focus on Europe, which it says represents close to 80% of its retail sales volume. Polestar also says 94% of its first-quarter 2026 retail sales volume came from markets outside the U.S. That means America was not Polestar’s biggest market, but losing access to the U.S. is still a major blow for any automaker trying to establish itself as a global premium EV brand.
For current owners, the biggest questions now are resale value, future software updates, warranty support, and whether Polestar’s service network remains viable long-term. Polestar says support will continue, and Reuters reported the company plans to provide service through 32 centers based in Volvo dealerships.
For shoppers, my advice is simple: proceed carefully. A leftover Polestar could become a bargain, but bargains sometimes come with baggage. Ask hard questions about warranty coverage, parts availability, software updates, lease terms, resale value, and where exactly the vehicle will be serviced. There is nothing wrong with buying an orphaned or semi-orphaned brand if the price is right, but you need to know what you are getting into before you sign.
As of today, this is not a rumor and it is not internet drama. Polestar has confirmed the government decision, the rule is already in effect, and the restriction begins with model year 2027. For a brand that wanted to be a major EV player in America, that is not just a speed bump. It is a roadblock.