Polestar to Exit the U.S. Market After Failing to Meet New Connected Vehicle Rules

Polestar has confirmed that it will leave the U.S. new-car market starting with the 2027 model year after failing to receive approval under new federal regulations governing connected vehicles.

The decision stems from the Connected Vehicle Rule, which prohibits the sale of vehicles equipped with software or telematics systems that have ties to China or Russia. Although Polestar is headquartered in Sweden, the company is owned by China's Geely Holding Group, preventing it from meeting the new regulatory requirements.

The automaker stressed that the move will not affect existing owners. Polestar will continue selling its remaining inventory of Polestar 3 and Polestar 4 models already in the country, while warranty coverage, maintenance, and access to the company's service network will remain fully available for current customers.

According to Polestar, the loss of the U.S. market is expected to have only a limited impact on its overall business. During the first quarter of 2026, approximately 94% of the company's global sales came from markets outside the United States, with nearly 80% of deliveries taking place in Europe.

As a result, Europe will become the company's primary growth market moving forward. Polestar also plans to expand its presence in Canada, Southeast Asia, Eastern Europe, and Latin America.

The regulatory decision means American buyers will not see several upcoming Polestar models, including the production version of the Polestar 5, the next-generation Polestar 2, and the new Polestar 7 compact crossover. The Polestar 7 is already scheduled to be built in Europe rather than China.

Interestingly, another Geely-owned brand, Volvo, successfully received approval under the new U.S. rules and will continue selling vehicles in the American market. That outcome suggests U.S. regulators evaluate compliance on a manufacturer-by-manufacturer basis rather than applying a blanket decision across an entire corporate group.