Polestar faces US sales ban for new models from 2027

According to German media, the US Department of Commerce has denied Polestar an exemption under the Connected Vehicle Rule. The regulation restricts the sale of connected vehicles manufactured by companies, or using certain software suppliers, that are controlled by China or Russia. The US government says the measures are intended to address national security concerns related to vehicle data and connected systems.

The decision applies to new model variants from the 2027 model year onwards. Vehicles already produced, including the Polestar 3 and Polestar 4, as well as all model-year 2026 and earlier vehicles, can continue to be sold in the United States. Only a few weeks ago, Polestar introduced updates for both models for the 2027 model year. The Polestar 3 gained an 800-volt electrical architecture and higher charging power, among other upgrades, while changes to the Polestar 4 were largely limited to a revised suspension setup.

According to company statements, Polestar plans to focus more strongly on Europe in the future. Around 80 percent of its global sales already come from the European market. In the first quarter of 2026, 94 percent of its vehicles were sold outside the USA. The company’s headquarters are located in Gothenburg, Sweden.

Connected vehicle rule goes beyond tariffs

The Connected Vehicle Rule stems from a US government initiative launched in 2024. Former US President Joe Biden described modern vehicles as ‘smartphones on wheels’ and highlighted potential risks associated with access to vehicle data and connectivity with critical infrastructure. The regulations were finalised in their current form at the end of last year and extended to include Russia alongside China.

The Connected Vehicle Rule applies to connected passenger cars weighing up to 4.5 tonnes. From the 2027 model year onwards, it prohibits the sale of vehicles if their manufacturers or suppliers of security-relevant software are controlled by China or Russia. The regulation primarily affects connectivity, driver assistance and automated driving systems. From the 2030 model year, the requirements will also apply to the corresponding hardware.

The rules also prohibit Chinese manufacturers from testing automated vehicles on public roads in the United States. They are not limited to Chinese car brands, however. Manufacturers from other countries may also be affected if their vehicles or the hardware and software they use fall within the scope of the regulation.

The US Department of Commerce can grant exemptions under the rule. Volvo has received such an exemption, while Polestar’s application was rejected. Neither the companies nor the US authorities have explained the different decisions. Both Volvo and Polestar are majority-owned by China’s Geely Group.

The Connected Vehicle Rule thus complements the USA’s existing trade barriers against Chinese vehicle manufacturers. While tariffs primarily hinder the import of Chinese electric cars, the new regulations target the hardware and software used in vehicles, as well as their connectivity. Washington’s goal is to gradually exclude security-relevant vehicle technologies with ties to China or Russia from the US market.

handelsblatt.com, heise.de (both in German)