Polestar remains without answers from the U.S. government after being denied authorization to sell its vehicles in America from model year 2027 onward. While Volvo, its corporate cousin, was granted permission to continue sales, Polestar says it still has not received an explanation for the decision. As the automaker prepares to exit the U.S. market, it is offering significant discounts on its remaining models.
Polestar Seeks Answers from U.S. Authorities
Polestar has stated that the U.S. Department of Commerce has not provided a reason for its decision to block the company from selling cars in the United States starting with the 2027 model year. In a letter to dealers, Polestar’s U.S. head of government affairs, Peter Wexler, wrote, “In essence, we are currently focusing on getting the attention of (the Commerce Department) to obtain the requested information and to understand the underlying basis for the denial.”
The automaker emphasized that its Polestar 3 electric SUV is mechanically identical to the Volvo EX90, and both are assembled at the Volvo Cars plant in Ridgeville, South Carolina. Wexler added that the Volvo EX90 was “a car that is essentially the same as the Polestar 3 and that uses the same software stack.”
Connected Vehicle Rule at the Center
The U.S. government’s decision is rooted in the Connected Vehicle rule, finalized by the Biden administration. This regulation restricts vehicles linked to hardware or software from foreign adversaries, including China and Russia, from being sold in the U.S. The rule cites concerns that vehicles connected to Chinese technology, such as telematics and advanced driver assistance systems, could pose national security risks or be used for surveillance.
Legal Action and Market Response
The situation took another turn when a New Jersey Polestar dealer, Prestige Imports, filed a lawsuit against the automaker. The dealer alleges that Polestar had been planning its U.S. exit for two years and used the government ruling as a pretext. The lawsuit claims Polestar violated New Jersey’s Franchise Practices Act, which generally requires at least 60 days advance written notice and good cause before terminating a franchise.
Meanwhile, Sweden’s Minister for Foreign Trade, Benjamin Dousa, stated that he worked closely with Volvo to ensure it met the Connected Vehicle Rule requirements to continue selling cars in the U.S. Dousa noted that Polestar did not seek the same assistance.
Polestar Shifts Focus to Europe and Offers Major Discounts
Polestar has not appealed the U.S. government’s decision and instead is shifting its focus to the European market, which now accounts for 80% of its global sales. As it winds down its U.S. operations, Polestar is offering a $25,000 (~AUD 34,880) discount on the Polestar 4 coupe and Polestar 3 SUV. This move gives American buyers a rare opportunity to purchase these models at a significant markdown before sales end.
Why this matters
Polestar’s removal from the U.S. market highlights the impact of evolving national security regulations on global automakers, especially those with Chinese ownership or technology links. The lack of clarity from U.S. authorities has left both the company and its dealers in a state of uncertainty, while buyers are presented with unusual discounts as the brand exits the country.
What this means for buyers
For U.S. consumers interested in a Polestar vehicle, now may be the last chance to purchase one new, with substantial discounts available on remaining inventory. Buyers should be aware that future support and service for these vehicles could be affected as Polestar winds down its American operations.
Key Specs
- Ban Effective Date: Model year 2027 onward
- Discount on Polestar 3 and 4: $25,000 (~AUD 34,880)
- Primary U.S. Production Site: Volvo Cars plant, Ridgeville, South Carolina
- European Market Share: 80% of global sales
Source
Images sourced from: polestar.com, insideevs.com
