US Blocks Polestar 2027 Model EV Sales Over China Tech Ban
US denies Polestar authorization to sell 2027 model year EVs under China tech restrictions.
Why it matters: The ruling highlights regulatory and compliance challenges for EV makers with foreign ownership involving connected vehicle technology. It signals increased enforcement risk amid US-China tech tensions.
- US Department of Commerce blocks Polestar EV sales starting with the 2027 model year citing the Connected Vehicle Rule.
- Polestar is majority-owned by China's Geely Holding Group, raising national security concerns about data access and connectivity.
- Volvo, also owned by Geely, secured a Commerce Department waiver in May 2026 allowing it to continue US sales.
- Polestar US dealerships will remain open for existing customer support and to clear inventory despite the sales prohibition.
The US Department of Commerce's Bureau of Industry and Security has denied Polestar authorization to sell electric vehicles starting with the 2027 model year under the "Connected Vehicle Rule." The rule restricts sales of vehicles containing hardware or software connected to China or Russia due to national security concerns.
Polestar is majority-owned by Chinese automaker Geely Holding Group, which also owns Volvo Cars. Despite this shared ownership, Volvo received a Commerce Department waiver in May 2026 permitting it to continue selling vehicles in the US market, while Polestar’s authorization was denied.
The department explained that companies linked to certain countries "may be compelled to share data or allow remote access to connected vehicles in the United States," which forms the basis for the ban on Polestar's 2027 model year EV sales.
Polestar’s US dealerships will remain operational to service existing customers and clear current inventory but cannot sell new 2027 model year vehicles. In the first quarter of 2026, Polestar's US retail sales represented a small portion of its total volume, with 94% of sales occurring outside the US, according to TechCrunch.
This decision highlights the intricate regulatory environment for automotive manufacturers navigating technology export controls, data privacy, and geopolitical tensions. The differing outcomes for Polestar and Volvo underscore the nuanced regulatory assessments companies face under US trade and technology enforcement policies.
By the numbers:
- 94% — Polestar's first-quarter 2026 sales outside the US
- May 2026 — Date Volvo received waiver from US Department of Commerce
- 2027 model year — Effective date Polestar's EV sales were blocked