Polestar claims it was blindsided by sales ban

In an August 18th letter sent to dealers and obtained by The Verge, Polestar said it doesn’t have a clear answer as to why its application to continue selling its EVs in the US was denied, considering its sister company Volvo was authorized to sell its vehicles despite similar corporate ownership. (The letter was first reported by The Wall Street Journal.)

The US Department of Commerce approved Volvo in May 2026 to continue importing and selling its vehicles in the US, despite restrictions tied to its majority Chinese owner, Geely. But one month later, the department rejected Polestar’s similar request, leading to the company to announce it would stop selling its vehicles in the US starting with the 2027 model year. The rule, which originated under the Biden administration, bans the import and sale of vehicles with connected software from hostile countries, including China.

In the letter to dealers, Polestar’s head of product Peter Wexler lays out the timeline of the company’s communications with the Trump administration, starting with a May 29, 2025 application to the
Bureau of Industry and Security (BIS) under the Commerce Department. In subsequent meetings, Wexler says Polestar was given the impression that Polestar would be approved, considering its vehicles are functionally similar to Volvo’s.

Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, said during an in-person meeting with Polestar’s representatives “that it would be reasonable for Polestar to expect approval of its applications if Volvo Cars was approved to sell its cars under effectively the same shareholding and ownership structure and with the same hardware and software in the Polestar 3 as the Volvo EX90,” Wexler writes.

Polestar told the administration it open to a variety of “mitigation measures” to ensure its vehicles were compliant with the ban on Chinese software, including regular audits, geographic restrictions on data storage and management, and limitations on digital keys and remote access. But the administration declined all such offers, Wexler said.

“BIS never engaged in any such discussions with Polestar,” he writes. “Instead, BIS communicated that it had all the information it required to render a decision.”

Wexler said that Polestar is continuing to press the administration for an explanation on why it was denied approval. The company was sued recently by Polestar dealer Prestige Imports in New Jersey, which accuses the company of engineering its own exit from the US by failing to do enough to satisfy regulators at the Commerce Department.