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Breaking News | Polestar Banned From US Sales After 2027 as Commerce Blocks China-Linked EV
1 min read
Suhaib
Commerce Department denial shuts Polestar out of the US market entirely from model year 2027, forcing the brand to exit and redeploy capital to Europe. Volvo-same owner, same plant-granted authorization in May; US precedent now targets brands selectively.
Key Numbers
What happened
The US Department of Commerce denied Polestar authorization under the Connected Vehicle Rule, prohibiting import and sale of vehicles from model year 2027 onward. The rule bans Chinese-origin software starting with MY2027 and hardware from 2030 on data security grounds. Polestar-majority owned by China's Geely-will sell remaining inventory of the Polestar 3 and Polestar 4 before winding down US operations and redirecting commercial efforts to Europe. Sister brand Volvo, also Geely-owned and sharing the South Carolina assembly line, received authorization in May after "constructive discussions" with Commerce officials; no explanation provided for the differential treatment. Polestar posted a Q1 2026 net loss of $383 million-more than double the $166 million loss in Q1 2025-as tariffs and pricing pressure pushed gross margin to negative 3.2% from positive 10.3% a year earlier. The company stated 94% of Q1 2026 retail volume came from markets outside the US.
What to watch
MY2027 certification deadline timing for inventory selldown
South Carolina plant utilization and potential Polestar 3 production shift to European facilities
Whether other Chinese-linked brands face similar denials under case-by-case review process
Q2 2026 results for guidance on Europe ramp and revised margin trajectory
Also Worth Watching
Ford's luxury EV Lincoln brand competes for the same premium buyers Polestar is now forced to abandon in the US, potentially capturing share as dealers absorb stranded customer demand and lease returns. F (Ford Motor Company $13.90 (-0.7%) - )
Company Overview
Polestar manufactures and sells premium electric vehicles under the Polestar brand, competing in the luxury EV segment. The company generates revenue through vehicle sales in Europe, North America, and Asia, along with recurring service and digital offerings.
