Polestar Questions US Ban Despite Volvo Approval Under Same Ownership
Swedish electric vehicle maker Polestar has confirmed it will not appeal a United States decision to ban its new vehicles from the American market from 2027, yet the company is demanding clarity on why it was treated differently from Volvo, a brand under the same Chinese ownership structure.
According to documents obtained by the Wall Street Journal, Polestar had expected to receive approval to continue selling its vehicles in the US. The company says it was caught off guard by the decision after spending more than a year cooperating with the US Department of Commerce.
What Led to the US Ban on Polestar?
Polestar first submitted an application to the Commerce Department's Bureau of Industry and Security in May 2025, seeking permission to continue selling connected vehicles in the US. The application was reviewed for more than a year, during which Polestar answered detailed questions from federal officials.
The automaker also offered several measures to address the government's security concerns, including cybersecurity reviews, audits, and changes designed to prevent China-linked entities from managing vehicle data.
According to Polestar, officials told the company's outside counsel in January 2026 that they had received enough information and were preparing to recommend approval. Then, in April, a Commerce Department official reportedly told Polestar that approval would be reasonable to expect if Volvo received authorization under the same ownership structure and with similar hardware and software.
Why Did Volvo Get Approval and Polestar Not?
Volvo received its approval in May, while Polestar's application was denied the following month. Polestar says the different outcomes could amount to disparate treatment.
The dispute centers around the US government's Connected Vehicle Rule, which restricts the sale of certain connected vehicles and components linked to China and Russia over national-security concerns.
The rules are designed to prevent foreign adversaries from potentially accessing sensitive information collected by connected vehicles or remotely influencing vehicle systems through software and communications hardware.
That means building a car in America does not necessarily get an automaker off the hook. Even though the Polestar 3 is built in South Carolina, its Chinese ownership and technology ties still put it under the government's scrutiny. Volvo has many of the same connections, yet it was allowed to continue selling vehicles in the US.
What Happens to Polestar Customers in the US?
For American buyers, the immediate situation has not changed. Polestar will stop selling new vehicles in the US after the 2026 model year, although dealers can continue selling remaining inventory.
The company says it will continue supporting existing owners, including warranty coverage, service, repairs, parts, and software updates.
Polestar has already decided not to appeal the Commerce Department's ruling, saying its discussions with US officials led it to believe an appeal was unlikely to succeed. Instead, the automaker plans to focus its investments on other markets, particularly Europe.
So while Polestar may be done fighting to stay in the US, the automaker still wants answers.
Is There a Difference Between Polestar and Volvo?
Polestar and Volvo are not identical companies, and there may be differences in how the two handle software; the Commerce Department has not publicly explained those differences. The lack of a public explanation is at the heart of Polestar's frustration.