- Polestar will stop selling new cars in the U.S. from the 2027 model year after its connected-software approval was denied.
- Existing Polestar owners keep service and warranties, but the company will shift sales focus to Europe and other regions.
- U.S. rules target vehicle software origin, forcing regionalized auto competition and sparing only models with compliant software.
Polestar said in a statement on Thursday that its application to continue selling new vehicles in the United States had been rejected following new U.S. federal regulations governing connected vehicles.
Beginning with its 2027 model year lineup, Polestar will no longer be able to sell new vehicles in the U.S.
Existing models will remain on sale, while after-sales service and warranty coverage for current customers will continue without interruption.
The change stems from a ruling by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) under the Connected Vehicles Rule.
The regulation prohibits the import and sale of connected vehicles equipped with software originating from “countries of concern,” with China included on the list.
The rules cover connected vehicle technologies including Bluetooth, Wi-Fi, cellular communications and satellite connectivity, while also restricting the testing of Chinese autonomous vehicles in the United States.
U.S. regulators argue that such connected software and hardware could pose risks to data security and critical infrastructure.
Polestar said it will not appeal the decision. Instead, the company will continue selling existing inventory while maintaining repair, maintenance and warranty services for current U.S. customers.
The sales restriction applies primarily to 2027 model year vehicles and later.
The company had anticipated such an outcome. As early as the beginning of 2025, Polestar warned that it could be forced to exit the U.S. new-car market if the regulation came into force.
Polestar’s current U.S. lineup consists primarily of the Polestar 3 and Polestar 4. The Polestar 3 is produced at the company’s plant in South Carolina, while the Polestar 4 is manufactured in South Korea.
However, neither model meets the latest regulatory requirements because of the origin of their connected software.
With its U.S. business constrained, Polestar is shifting greater focus toward Europe and other international markets.
Company data show that 94% of its retail sales in the first quarter of 2026 came from markets outside the United States, with Europe accounting for roughly 80% of total sales.
The company plans to manufacture the Polestar 7 in Europe while continuing to expand across Southeast Asia, Eastern Europe, Latin America and Canada.
Polestar CEO Michael Lohscheller said the global automotive industry is entering an era of regionalized competition.
He added, the company’s future strategy will focus on strengthening its position in key regional markets, with Europe remaining its primary growth engine.
Notably, the U.S. restrictions do not apply to all automakers with Chinese ownership. Instead, regulatory scrutiny is primarily based on the origin of connected vehicle software.
Volvo Cars, which is also part of Geely Holding Group, recently obtained approval to continue selling eligible vehicles in the U.S. market.
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