The USA Says No to Polestar, Yes to Volvo: Same Ownership, Opposite Outcomes

The U.S. Department of Commerce, through the Bureau of Industry and Security (BIS), has denied Polestar the authorization to sell vehicles in the United States from the model year 2027. This measure blocks the arrival of any new models on American soil but leaves the sale of existing stock intact: dealers will be able to continue marketing the remaining units of Polestar 3 and Polestar 4, and the assistance network will remain active for existing customers.

At the center of the decision is the Connected Vehicle Rule, regulation aimed at January 2025 that prohibits the importation of vehicles equipped with connectivity systems (VCS) and automated driving systems (ADS) linked to China and Russia. Software restrictions will take effect with the model year 2027, while hardware restrictions will follow in 2030. The scope is broad: telematics, cameras, microphones, GPS, Bluetooth, cellular modules, and automated driving software, without distinction between internal combustion, hybrid, or electric drivetrains.

Same Ownership, Opposite Outcomes for Volvo
For Polestar, the issue is not where the cars are built, but who controls them. The Swedish brand is primarily owned by the Chinese group Geely, which also owns Volvo, and this ownership link triggers the ban regardless of production facilities. For the American market, the Polestar 3 comes from the Volvo factory in Ridgeville, South Carolina, while the Polestar 4 is assembled in Busan, South Korea, at a factory owned by Renault: neither is produced in Chinese territory.

Making the case even more peculiar is the treatment reserved for Volvo, controlled by the same Geely but authorized to continue selling connected vehicles in the United States. Volvo presents itself as a more established manufacturer with a broader American commercial presence, while Polestar shares platforms and software more closely with the rest of the Geely galaxy: a structural difference that, according to the BIS, justifies the two opposite outcomes.

Numbers certify how little weight the American market had in Polestar's plans. In 2025, the United States absorbed 5,384 units, down 58.8% year-on-year, against a global figure of 60,119 cars sold (+34%) and revenues exceeding 3 billion dollars. In the first quarter of 2026, deliveries hit a record of 13,126 units (+7%), with 94% of sales generated outside the United States. However, the gross margin tells a more delicate story: in the first quarter of 2026, it fell to -3.2%, compared to +10.3% during the same period the previous year, under pressure from customs tariffs and strained list prices.

CEO Michael Lohscheller has downplayed the exit from the U.S. market as a forward-looking decision, speaking about an automotive sector that "is entering a new phase, based on regional dynamics" and pointing to Europe, which already accounts for about 80% of the brand’s retail volumes, as the "most important growth engine." Among the announced moves are the expansion of the European commercial network and the localization of future production, starting with Polestar 7, a compact SUV rival to the Tesla Model Y, which will be built in Europe.