Polestar Says It Was 'Blindsided' by US Sales Ban, Alleges Administration Delays

Electric vehicle maker claims Commerce Department strung it along before denying exception under China-connected vehicle rules

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By LineZotpaper

Published26 August 2026

Read Time3 min

Polestar has accused the Trump administration of delaying its bid to continue selling EVs in the US before ultimately rejecting it on national security grounds, according to a letter sent to dealers.

Polestar says it was blindsided by the decision to bar its vehicles from the US market, claiming the Commerce Department strung it along for months before finally denying its request under rules targeting Chinese-connected vehicle software.

The Swedish-Chinese automaker, which is majority-owned by China's Geely, had sought an exemption to continue selling its electric cars in the US under the 2024 connected-vehicle rule. That rule prohibits vehicles with certain Chinese-made software or hardware components.

In an August 18th letter to dealers, obtained by The Verge, Polestar stated that its application was denied without clear explanation. The company noted that its sister brand Volvo, which shares similar ownership structure and supply chains, was authorized to continue selling its vehicles in the US.

The Commerce Department's decision, first reported by the Wall Street Journal, was made under Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports for national security reasons.

Polestar had been in discussions with the administration for months, submitting extensive documentation to prove that its vehicles did not pose a security risk. The company argued that its software and hardware were compliant with US regulations and that its supply chain was transparent.

However, the Commerce Department ultimately concluded that Polestar was too closely tied to Chinese interests, given Geely's majority stake and the involvement of Chinese state-owned entities in its operations.

Polestar's dealers were informed that the company was 'disappointed' and 'surprised' by the decision, especially given Volvo's approval. Volvo, also owned by Geely, had its vehicles cleared in May 2026 after agreeing to stricter cybersecurity and data protection measures.

Polestar is now exploring legal options and may challenge the decision in federal court. The company has also announced plans to localize production in the US, but that process is expected to take years.

The ban applies to the 2027 model year and beyond. Polestar says it will stop delivering new vehicles to US dealers after the current model year ends, but will continue to support existing owners and provide service and parts.

The decision highlights the growing tensions between the US and China over technology and national security, and raises questions about the future of Chinese-affiliated automakers in the American market.

Analysis

Why This Matters

This decision directly affects Polestar's US customers and dealers, who may face uncertainty about service and resale value.
It signals a broader trend of US regulators tightening restrictions on Chinese-owned or influenced technology, even for brands perceived as European.
The move could set a precedent for other automakers with Chinese ties, potentially reshaping the US auto market.

Background

Polestar's ban stems from a 2024 Department of Commerce rule restricting vehicles with connected software or hardware from China due to national security concerns. The rule was designed to prevent China from accessing US driver data or remotely controlling vehicles. Polestar, headquartered in Sweden but majority-owned by China's Geely, had sought an exemption to continue selling its EVs in the US. The company argued that its operations and supply chain were transparent and compliant. The Trump administration, which had been discussing the matter with Polestar for months, ultimately denied the request in August 2026, citing national security concerns. This denial came after Volvo, also owned by Geely, was approved to continue selling its vehicles in May 2026, suggesting a case-by-case evaluation process.

Key Perspectives

Polestar: The company and its dealers argue that the decision is unfair and lacks clear reasoning. Polestar contends that it has complied with all regulations and that its vehicles are safe, having worked with the administration in an open and transparent manner. Dealers are concerned about the impact on their businesses and the availability of parts and service.

[Commerce Department officials]: They maintain that the ban is necessary to protect national security. They believe that Polestar does not meet the requirements for an exemption under the connected-vehicle rule, despite its compliance efforts. The department asserts that the decision was made after careful consideration of all relevant factors.

[Critics/Skeptics]: Some industry observers and legal experts question the fairness of the decision, suggesting that the administration may have delayed the process to pressure Polestar or to set an example for other Chinese-linked automakers. They argue that the denial could have been communicated more transparently and that the lack of clear reasoning undermines trust in the regulatory process.

What to Watch

Watch for Polestar's potential legal challenge and whether it gains traction in court.
Monitor if other Chinese-linked automakers face similar bans or restrictions in the future.
Observe how the Biden administration, if elected in 2028, might revise or soften these national security-based trade measures.

Sources

Polestar claims it was blindsided by sales ban — The Verge