Polestar Won't Fight US Ban, Effectively Ending Its American Future

The automaker says it won't challenge a federal ban on future vehicle sales, despite now building some of its cars outside China.

Polestar Not Appealing US Ban

Photo by: Jeff Perez / Motor1

Jeff Perez

By: Jeff Perez

Jul 20, at 4:42pm ET

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the breakdown

Polestar won't appeal the US government's decision to block future vehicle sales.
The ban stems from new connected-car security rules targeting Chinese software in internet-connected vehicles starting with the 2027 model year.
Polestar will shift its focus to Europe.

Polestar is officially giving up on the US market, it seems. According to a new report from the Wall Street Journal, the Chinese-backed automaker won't challenge the US government's decision to block future sales of its vehicles.

The decision effectively ends the Swedish EV maker’s presence in one of the world's biggest auto markets. Instead of appealing the Commerce Department's ruling or pursuing legal action, Polestar says it will shift its attention elsewhere.

"We will instead focus our investments on markets where we have a strong brand position and ability to achieve profitable growth, with a strong weighting towards Europe," Polestar spokesman Michael Ofiara told the WSJ.

Ofiara added that the company had held "significant dialogue" with US officials and concluded an appeal was unlikely to succeed. Motor1 reached out to Polestar for an official statement.

Polestar 3 Performance (2024) first drive

Polestar 3 Performance

Photo by: Polestar

Why Polestar Was Banned

The Commerce Department's decision to ban Polestar in the US stems from new connected-vehicle security rules. Those rules prohibit Chinese software in internet-connected vehicles beginning with the 2027 model year.

US officials argued that cameras, GPS systems, and other connected technologies could pose national security risks if controlled by foreign adversaries. Polestar, which is majority-owned by China's Zhejiang Geely Holding Group, said it was denied a special authorization that would have allowed it to continue selling vehicles despite the new rules.

Volvo, also majority-owned by Geely, received that approval earlier this year after demonstrating how it handles vehicle data and cybersecurity. The Commerce Department has declined to explain why the two companies received different outcomes.

2023 Polestar 3

Ironically, Polestar no longer sells Chinese-built vehicles in the United States. The Polestar 2 left the market after tariffs on Chinese-built EVs took effect, while the Polestar 3 is built in South Carolina alongside the Volvo EX90 (which is sold in the US). The new Polestar 4 is built in South Korea.

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The move could also hurt existing owners, with Polestar's departure likely to have a huge hit on resale values, especially now as the company is clearing out remaining inventory with discounts reportedly reaching as much as $25,000.

Motor1's Take: Polestar's exit is big, not just because the company was a major sales player, but because it raises questions about how the US is applying its new connected-car security rules. Polestar and Volvo share ownership, engineering, and even production facilities, yet one brand received approval while the other was shut out.

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Source: Wall Street Journal

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