Geely-owned Polestar will stop selling vehicles in the US from 2027 after a federal regulator rejected its application under the Connected Vehicle Rule.
The US Department of Commerce’s Bureau of Industry and Security (BIS) refused to approve the Swedish electric vehicle manufacturer under the regulation.
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First adopted in January 2025 during former US President Joe Biden’s administration, the rule has remained in force under President Donald Trump.
The Connected Vehicle Rule is a US national security regulation from the BIS banning the import and sale of connected vehicles, software, and hardware tied to foreign adversaries.
The measure prevents the import and sale of connected vehicles linked to China, with US authorities citing national security concerns related to the collection of data from American vehicle owners.
It covers technologies such as Bluetooth, Wi-Fi, cellular connectivity and some satellite communications.
Polestar, which is majority-owned by China’s Geely Holding, said it would continue to sell its remaining US stock of the Polestar 3 and Polestar 4.
The company added that it would keep its service network in place for current customers.
The carmaker said it is now placing greater strategic focus on Europe, a region that already represents about 80% of its retail sales volume.
During the first quarter of 2026, 94% of Polestar’s retail sales came from markets outside the US.
Polestar CEO Michael Lohscheller said: “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.
“In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America and Canada.”
As part of that shift, Polestar plans to broaden its dealer presence across Europe and is pursuing efforts to localise manufacturing for future models.
The group has also recently expanded into the Baltic states of Estonia, Latvia and Lithuania, bringing its presence to 31 markets worldwide.
That move is being carried out in partnership with Volvax Baltic, which will use its existing retail network across the region.
