Swedish EV maker Polestar (PSNY) said it will no longer sell cars in the US after the Commerce Department banned its sales here.
Polestar, owned by Chinese automaker Geely, said US authorities decided not to “grant Polestar authorization under the current US Connected Vehicle Rule,” meaning the company will not be able to market or sell new model-year 2027 vehicles.
The Connected Vehicle Rule targets data security concerns by restricting the use of certain foreign technologies in two areas. The software ban restricts the use of software developed or maintained by Chinese or Russian companies for the 2027 model year. A hardware restriction prohibits the import and sale of vehicle-connected hardware from these countries starting in 2030.
Polestar stock was down by more than 13% in midday trade.
Polestar’s ban comes as it makes one of its vehicles, the Polestar 3, at its plant shared with Volvo, also a Geely portfolio company. Volvo, however, received a waiver to sell vehicles despite the rule.
“The process is carried out on a case-by-case basis and the issuance of a specific authorization follows constructive discussions with the US Department of Commerce and other US officials regarding Volvo Cars’ governance, technology and data security,” Volvo said about its waiver in May.
With Polestar unable to get approval, the company will slowly wind down its US sales and marketing operations and focus on the EU market. Polestar noted that “existing Polestar owners and lease customers will continue to receive the same level of support and access to service as they do today,” and that all “existing warranties remain in effect and will continue to be honored in accordance with their terms and conditions.”
This story is developing.
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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