Polestar is ending new vehicle sales in the United States after the automaker was denied authorization under the U.S. government’s Connected Vehicle Rule. With the ruling, the automaker says it will redirect its growth strategy toward Europe and other international markets, including Canada.
The decision, announced on Thursday, means Polestar will no longer market or sell new model year 2027 vehicles in the U.S. Existing inventory of the Polestar 3 and Polestar 4 will continue to be sold while supplies last, and the company says current owners will continue to receive service and customer support through its existing dealer and service network.
The move stems from the U.S. Department of Commerce’s Connected Vehicle Rule, which restricts the sale of connected vehicles tied to companies owned or controlled by China or Russia. Although Polestar is headquartered in Sweden, it is owned by Geely, the Chinese automotive giant that also owns Volvo Cars.
Interestingly, the decision differs from Volvo’s outcome. Volvo was granted authorization to continue selling connected vehicles in the U.S., despite also being owned by Geely. Even local production wasn’t enough to secure an exemption for Polestar. The Polestar 3 is assembled at Volvo’s factory in Charleston, South Carolina, while the Polestar 4 is produced in South Korea.
While the decision appears to be a major setback for Polestar, the automaker says it aligns with a broader shift already underway. Europe now accounts for nearly 80% of the company’s retail sales, while 94% of first-quarter 2026 deliveries came from markets outside the United States.
“The automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe. Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches taking place in Europe this year. In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America and Canada,” said Polestar CEO Michael Lohscheller.
Canada appears to be one of the markets set to benefit from that shift. While the company did not announce any specific Canadian expansion plans, Lohscheller specifically identified Canada as a market where Polestar sees continued growth opportunities. That could translate into increased retail investment or additional product availability as the brand reallocates resources previously dedicated to the U.S.
The company also reaffirmed its future product roadmap despite the U.S. exit. Customer deliveries of the new Polestar 5 are scheduled to begin this summer, followed by a new variant of the Polestar 4 later this year. An all-new Polestar 2 is expected to arrive in 2027, with the Polestar 7 compact SUV set to follow.
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