Polestar blocked from US sales under China-linked vehicle crackdown

Key Points:

• The Trump administration is blocking Polestar, a Sweden-based electric vehicle maker majority owned by China's Geely, from selling vehicles in the U.S. starting with the 2027 model year due to new regulations targeting connected vehicle technology linked to China.
• The Commerce Department's Bureau of Industry and Security declined Polestar's authorization under the Connected Vehicles Rules, which restrict imports of cars with Bluetooth, wireless internet, cellular, and satellite communications technologies over national security concerns.
• Polestar CEO Michael Lohscheller announced a strategic shift to focus more on European markets, where 94% of the company's retail sales occurred in Q1 2026, and plans to manufacture the Polestar 7 in Europe while continuing investments in Southeast Asia, Eastern Europe, Latin America, and Canada.
• Despite the sales ban for future models, Polestar will continue selling existing stock of Polestar 3 and 4 vehicles in the U.S. and maintain customer service support; the Polestar 3 is currently the only model produced in the U.S.
• Polestar has faced financial challenges with repeated capital injections from Geely and declining stock value, leading to a reverse stock split last year to stay listed on Nasdaq; the impact of the ban on Volvo's production plans for Polestar 3 in South Carolina remains uncertain.