Premium electric vehicle maker Polestar is abandoning the U.S. auto market after the Department of Commerce’s Bureau of Industry and Security did not grant it authorization to sell vehicles from model year 2027 onwards, because of connected vehicle technology linked to China.
The move comes just less than a month after its sister brand Volvo Cars, also owned by China-based automaker Zhejiang Geely Holding Group, granted permission to continue trading in the U.S.
The Bureau withdrew authorization under its Connected Vehicle Rule, which restricts the import and sale of cars equipped with connected-vehicle technology linked to China or Russia.
Polestar will continue to sell existing stock of Polestar 3 and Polestar 4 EVs in the U.S. and will continue to support its customers, including providing access to its service network, the company said in a June 25 release.
The company said it will now concentrate on the European market, which accounts for 80% of its retail sales, by continuing to expand its sales network and prepare to localize the manufacturing of future Polestar models.
Despite Volvo Cars’ commitment in April to the exclusive global manufacturing of the Polestar 3 sedan at its factory in Charleston, South Carolina, the U.S. market accounted for just 6% of the brand’s global sales volume.
Polestar is now expanding its retail footprint across Europe by entering the Baltic markets of Estonia, Latvia and Lithuania, the company announced in a June 1 release.
This expansion is taking place together with its regional importer Volvax Baltic by using its existing network of retailers in the region. The first dedicated Polestar Space will open this month in Tallinn, Estonia, followed by sites in Riga, Latvia, and Vilnius, Lithuania, during the second half of the year.
“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,” Polestar CEO Michael Lohscheller said in a company statement.
“A new variant of our global bestseller, Polestar 4, is planned for the second half of this year, followed by the all-new Polestar 2 in 2027, and thereafter the Polestar 7 compact SUV,” he added.
