Polestar can no longer sell new cars in the United States past the 2027 model year. The US Department of Commerce’s Bureau of Industry and Security refused the EV maker the clearance it needs to keep doing business in the country, citing the Connected Vehicle Rule. Geely owns a majority stake in the brand, and that Chinese ownership is the reason the rule bites.

Washington has spent months working to block cars built and exported from China, with the Trump administration casting the effort as protection for domestic manufacturing. Polestar just happens to be the latest brand swept up in it.

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The Connected Vehicle Rule, finalized under the Biden administration, bars cars with Chinese or Russian software and hardware in their connectivity systems from the US market on national-security grounds. The fear is data and remote access, a connected car built within Beijing’s reach feeding information home or tampered with from afar.

Software restrictions land first, for the 2027 model year, with the hardware side following in 2030. Automakers need an authorization to sell in America, and while Polestar didn’t get one, sister brand Volvo, also Geely-owned, secured a waiver in May. Lincoln and Buick will have to clear the same hurdle, since both sell Chinese-built models in the States, the Nautilus and Envision respectively.

The South Carolina Problem

Washington’s decision hits hardest on the Polestar 3, the only model the automaker builds here in the United States, assembled at its South Carolina factory since 2024. Those American-made examples don’t stay local either, since they’re shipped across to Europe as well. What happens to that operation now is up in the air.

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Existing stock is safe for now, with whatever 3 and 4 inventory remains in the States still up for sale. But with the brand effectively locked out of the country, the real question is whether anyone will want one, even with a promise to keep servicing those cars and looking after the people who already bought them.

Europe Was Always The Plan, Says Polestar

Polestar doesn’t appear to be contesting the decision either, and its own numbers might explain why. The U.S. was never where the money came from, with 94 percent of its retail sales in the first quarter of 2026 landing outside America. CEO Michael Lohscheller is pointing what’s left toward Europe and other growth markets. “The automotive industry is entering a new phase, based on regional dynamics,” he said in a statement.

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“Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe,” Lohscheller continued. “Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches taking place in Europe this year. In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America and Canada.”