Polestar barred from US over the Chinese connected vehicle rule, a dangerous precedent

Key Points:

• Polestar will cease selling new vehicles in the US market starting with model year 2027 after the US Department of Commerce declined to grant authorization under the Connected Vehicle Rule due to its majority ownership by Chinese automaker Geely.
• The Connected Vehicle Rule, effective from model year 2027, bans connected vehicles with significant ties to China or Russia from the US market, regardless of where the vehicles are assembled, affecting Polestar despite its models being built in South Carolina and South Korea.
• Volvo, also owned by Geely, received authorization to continue US sales, highlighting a distinction based on corporate structure and software sourcing rather than manufacturing location.
• Polestar will continue supporting existing US customers and focus on expanding its European market presence, which currently accounts for nearly 80% of its sales, while also exploring growth in Southeast Asia, Eastern Europe, Latin America, and Canada.
• The decision signals increased US regulatory scrutiny on automakers with Chinese ties and underscores potential challenges for companies with Chinese capital or technology in their supply chains amid broader US efforts to promote domestic EV production.