Polestar will cease sales of its vehicles in the United States following a directive from the U.S. Department of Commerce. The decision effectively ends the brand’s presence in the American market less than a decade after the launch of its first model, the Polestar 1 plug-in hybrid, introduced in October 2017.

The move stems from restrictions imposed by the Department of Commerce’s Bureau of Industry and Security, which has declined to grant Polestar authorization to sell vehicles from the 2027 model year onward in the U.S. The department’s policy targets connected vehicle systems that incorporate software from Russia or China, citing national security and privacy concerns. The restrictions on such software-enabled systems are slated to extend to related hardware components by 2030.

Commerce Secretary Gina Raimondo emphasized that these measures are intended to safeguard U.S. national security and protect American consumers from potential foreign interference. Polestar faces the ban due to its partial ownership by Geely Holding Group, a Chinese multinational automotive and technology conglomerate. Geely also holds a stake in the Swedish automaker Volvo, with which Polestar is jointly affiliated.

This action forms part of a broader U.S. push to limit Chinese involvement in critical technology sectors, including the electric vehicle (EV) market. Chinese EV manufacturers such as BYD and Geely have experienced rapid global sales growth, driven by competitive pricing and extended driving ranges, prompting heightened scrutiny from U.S. regulators. The current administration has further bolstered domestic manufacturing interests through tariffs on foreign parts and vehicles.

Despite Polestar’s withdrawal, its impact on the U.S. EV market is expected to be limited. In the first quarter of the year, Polestar sold just over 13,000 vehicles globally, with under 800 units delivered in the United States. Approximately 94% of Polestar’s sales occurred outside the American market. By contrast, American EV sales remain dominated by brands such as Tesla, Hyundai, Chevrolet, and Ford. Tesla in particular maintains a sizable lead, with models like the 2026 Model 3 and Model Y accounting for the majority of U.S. EV sales.

Industry observers question whether Polestar’s exit signals a broader trend, but most automotive brands face varying degrees of exposure to the new regulations. While Polestar’s ownership structure made it a clear target, several American automakers also rely on Chinese manufacturing for certain models. For example, Ford’s Lincoln Nautilus and General Motors’ Buick Envision, both built in China, may be affected by the connected-vehicle software restrictions, underscoring the complex supply chain challenges emerging within the industry.