Polestar says it was blindsided by US sales ban
Polestar says the Trump administration led it to expect approval for months before rejecting its request to keep selling EVs in the US, leaving the company without a clear explanation why sister brand Volvo was approved instead.
Electric vehicle maker Polestar says the Trump administration strung it along for months before ultimately denying its request to continue selling vehicles in the United States, under a rule that bans cars containing connected software from China.
In an August 18th letter sent to dealers and obtained by The Verge, Polestar said it still has no clear explanation for the rejection, especially since its sister company Volvo was approved despite having a similar corporate ownership structure.
Volvo approved, Polestar denied
The US Department of Commerce approved Volvo in May 2026 to keep importing and selling its vehicles despite restrictions linked to its majority owner, China's Geely. A month later, however, the department rejected a similar application from Polestar, prompting the company to announce it would halt US sales starting with the 2027 model year. The underlying rule, created under the Biden administration, bars the import and sale of vehicles carrying connected software from countries deemed hostile, including China.
In the dealer letter, Polestar's head of product Peter Wexler laid out a timeline of the company's dealings with the administration, beginning with a May 29, 2025 application to the Commerce Department's Bureau of Industry and Security. Wexler wrote that during subsequent meetings, Polestar was given reason to believe approval would follow, given that its vehicles are functionally similar to Volvo's. He said a senior Commerce official even acknowledged it would be reasonable for Polestar to expect the same outcome as Volvo, given matching ownership structures and shared hardware and software between the Polestar 3 and the Volvo EX90.
Polestar offered several mitigation measures, including regular audits and limits on data storage and remote digital-key access, but Wexler said the agency declined to discuss any of them, stating it already had enough information to decide. The company says it is still seeking an explanation for the denial. Separately, New Jersey dealer Prestige Imports has sued Polestar, alleging the company engineered its own US exit by failing to adequately satisfy regulators.
