Polestar to Exit US Market After New Connected Vehicle Rule Blocks Sales

Polestar has confirmed that it will no longer be able to sell new vehicles in the United States beginning with the 2027 model year after the U.S. Department of Commerce’s Bureau of Industry and Security ruled that its vehicles fall under the new Connected Vehicle Rule.

The regulation targets connected vehicle hardware and software linked to China or Russia, citing national security concerns.

New US rule forces Polestar out of the market

The Connected Vehicle Rule restricts the sale of new vehicles that contain connected vehicle hardware or software associated with China or Russia.

Although Polestar manufactures its Polestar 3 SUV in the United States, the company said the model will still be prohibited from sale beginning with the 2027 model year because of its ownership and supply chain connections. Polestar is majority owned by China’s Geely Holding, while several of its vehicles, including the Polestar 2, Polestar 4, and the upcoming Polestar 5 sedan, are produced in China, according to Top Gear.

According to the Bureau of Industry and Security, the restrictions are intended to address national security risks posed by connected vehicle technologies.

The agency said companies based in China or Russia could potentially be compelled to share vehicle data or enable remote access to connected vehicles operating in the United States.

Existing inventory will remain available

Polestar said it will continue selling its remaining U.S. inventory of Polestar 3 and Polestar 4 vehicles until stock is exhausted. The automaker also confirmed it will continue supporting existing owners through service and maintenance after it exits the new vehicle market.

The United States currently represents a relatively small portion of Polestar’s global business. According to the company, the market accounts for approximately 6% of its retail sales.

The decision marks another significant shift in the U.S. automotive market as regulations increasingly influence which automakers and vehicle technologies can be offered for sale. For Polestar, the Connected Vehicle Rule effectively ends its ability to introduce future model-year vehicles in one of the world’s largest automotive markets unless its vehicles can meet the new regulatory requirements.

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