Polestar Says It Was Caught Off Guard by Sales Ban
Polestar has expressed frustration over the lengthy process it endured with the Trump administration, which ultimately led to the rejection of its request to keep selling electric vehicles in the US. This decision was based on a rule that prohibits vehicles with connected software from China.
In a letter dated August 18th, shared with dealers, Polestar indicated that it remains unclear why its application was denied, especially since its sister company, Volvo, received approval to sell its vehicles despite having similar ownership ties. The US Department of Commerce granted Volvo permission in May 2026 to continue importing and selling its cars, even with restrictions due to its majority Chinese owner, Geely. However, just a month later, Polestar’s request was turned down, prompting the company to announce it would cease US sales starting with the 2027 model year. This rule, established under the Biden administration, prohibits the import and sale of vehicles featuring connected software from countries deemed hostile, including China.
In the letter, Polestar’s head of product, Peter Wexler, detailed the timeline of the company’s interactions with the Trump administration, beginning with a May 29, 2025 application to the Bureau of Industry and Security (BIS) within the Commerce Department. Wexler noted that during subsequent meetings, Polestar was led to believe that approval was likely, given the functional similarities between its vehicles and those of Volvo.
Jeffrey Kessler, the Under Secretary of Commerce for Industry and Security, reportedly told Polestar representatives that it would be reasonable to expect approval if Volvo Cars was allowed to sell its vehicles under a similar ownership structure and with comparable hardware and software.
Polestar also communicated its willingness to implement various “mitigation measures” to comply with the ban on Chinese software, such as regular audits, geographic restrictions on data management, and limitations on digital keys and remote access. However, Wexler stated that the administration rejected all these proposals, with BIS indicating it had sufficient information to make a decision without further discussion.
Wexler mentioned that Polestar is still seeking clarification from the administration regarding the denial of its application. Additionally, the company is facing a lawsuit from Polestar dealer Prestige Imports in New Jersey, which claims that Polestar has effectively engineered its own exit from the US market by not doing enough to meet regulatory requirements.
