The Trump administration has forced Polestar to stop selling cars in the United States, marking the end of the Swedish performance EV brand’s operations in one of its key markets.
The US Department of Commerce’s Bureau of Industry and Security denied Polestar approval to sell new vehicles from the 2027 model year onwards. The decision stems from the administration’s ‘Connected Vehicle Rule’ – a regulation that blocks sales of connected vehicles by manufacturers owned or controlled by China or Russia.
Polestar is owned by Chinese automotive giant Geely, which also controls Lotus and Smart brands.
The ruling affects most of Polestar’s lineup. The Polestar 2, Polestar 4, and upcoming Polestar 5 flagship are all manufactured in China. Only the Polestar 3 SUV gets built at Volvo’s plant in Ridgeville, South Carolina – the same facility that produces the Volvo EX90.
Washington considers Polestar a security threat. The White House believes products from Chinese-owned companies may be required to share data or allow remote access to connected vehicles operating in the US.
Volvo received authorization to continue US sales despite shared ownership under Geely. The US market represents 27.2% of Volvo’s global sales volume.
Polestar Shifts Focus to European Growth
CEO Michael Lohscheller responded to the US withdrawal with a strategy focused on regional expansion beyond North America.
“The automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe.”
Lohscheller highlighted the company’s recent performance metrics. Polestar achieved record sales in 2025 and continued that momentum through the first quarter of 2026.
The brand plans several new market launches across Europe this year. Polestar will also invest in Southeast Asia, Eastern Europe, Latin America and Canada – markets where growth opportunities remain available.
Two new models are confirmed for the near future. An estate version of the Polestar 4 will launch by the end of this year, followed by the new Polestar 7 crossover arriving by 2028.
The US exit represents a significant shift for Polestar, which positioned itself as a direct Tesla Model 3 competitor with its Polestar 2 sedan. The brand had built its identity around Swedish design principles while leveraging Geely’s manufacturing capabilities and Volvo’s engineering expertise.
European manufacturing for the Polestar 7 signals the company’s commitment to reducing its dependence on Chinese production facilities. This strategy could help Polestar avoid similar regulatory challenges in other Western markets where Chinese ownership faces increasing scrutiny.
