Polestar says US sales ban came after months of misleading signals from administration
Polestar alleges the Trump administration led it to believe its request to continue US EV sales would be approved, only to reject it under a rule targeting Chinese connected-vehicle software. In an August 18th letter to dealers, the company said it received no clear explanation for the denial, especially since sister company Volvo was granted an exemption. The Commerce Department approved Volvo in May 2026 despite its majority Chinese ownership by Geely.
The denial stems from a Biden-era rule prohibiting vehicles containing connected software from hostile nations, with China specifically named. Polestar's application process stretched over a year, beginning in late May 2025, and included in-person meetings where Commerce officials suggested approval was likely given the technical similarities between the Polestar 3 and Volvo EX90.
Volvo received Commerce Department authorization in May 2026 despite Geely's majority stake, while Polestar's rejection followed just weeks later. Polestar proposed compliance measures including regular audits and restrictions on where vehicle data could be stored, but the company says it received no clear justification for the differing outcome.
The divergent treatment of Volvo and Polestar could raise questions about consistency in how national security rules are applied to foreign-owned automakers. Existing Polestar owners may face reduced resale value and service support as the brand exits the US market. The decision could also influence how other companies with Chinese ties approach US market entry, potentially reshaping the competitive landscape for electric vehicles.