Regulators are halting sales of the automaker’s upcoming electric vehicle models due to its ties to China.
Omar Gallaga has covered technology, digital culture and other topics for outlets including CNET, NPR, WIRED, Texas Monthly, MSNBC, Consumer Reports, The Washington Post, the Los Angeles Times, The Atlantic and Austin American-Statesman, where he was a longtime reporter, editor and podcaster. He lives in the Texas Hill Country.
Automaker Polestar will not be allowed to sell its 2027 and beyond models in the United States after the U.S. Department of Commerce’s Bureau of Industry and Security banned such sales due to concerns about connected technology made in China. And the company has no plans to return.
The crux of the problem lies in Polestar’s ownership by Volvo and Volvo’s parent company, Geely, based in China.
The Swedish electric vehicle maker, which became a separate brand in 2017, revealed the ban in an SEC filing, which it paired with a press release this week announcing it was moving its manufacturing to Europe.
It said in the release that it will continue to sell its existing inventories of its Polestar 3 and Polestar 4 vehicles in the United States and support its customers through its service network.
A Polestar representative told CNET in an email that due to the Commerce Department’s decision, the company has no plans to sell new cars in the United States starting with the 2027 model year, including the planned Polestar 7.
The company marketed the Polestar 7 as a premium compact SUV. It is expected to be released in 2028.
The move is not surprising: a 2024 letter from Polestar (PDF) to the Office of Industry and Safety foreshadowed what would eventually happen. The company said at the time that the agency’s bans could eventually lead the company to stop selling vehicles in the United States, even those it makes in South Carolina.
The U.S. ban was not posted on the Commerce Department’s website or social media, but it is consistent with the agency’s directive to control technology from China, which the government considers a potential security threat. This month, the ministry fined Bosch $36 million for exporting automotive sensors and software to Huawei.
In May, however, the Bureau of Industry and Security granted Volvo special permission to sell its vehicles in the United States after the automaker said it had discussed its connected technology with the department.
A representative for the Bureau of Industry and Security did not immediately respond to a request for comment.
American agencies are not only interested in the automobile industry. The Federal Communications Commission has targeted consumer products including routers And drones which have technology made in China.
Considering electric vehicles in the United States
Polestar is not among the top 10 electric vehicle manufacturers, lagging behind big companies like Tesla, BYD and Volkswagen.
Electric vehicles represent only about 6.5% of the U.S. auto market, according to industry watcher Edmunds. In the United States, prices for electric vehicles are generally higher, and federal rebates to purchase this type of vehicle have been gradually phased out.
With gas prices high this summer, consumers may take another look at electric vehicles, but concerns remain on prices and range.
Some automakers are trying to boost the appeal of electric vehicles by offering cheaper models. Slate is taking pre-orders for a basic modular EV truck that costs $24,950 before shipping. Other models of electric vehicles, such as Chevrolet Boltcan be found for around $30,000.