Chinese-Linked EVs Kicked Out: Trump Administration Blocks Polestar Sales Without Mercy

Electric vehicle manufacturer Polestar is halting sales of new vehicles in the United States starting from the 2027 model year. The action was taken after President Donald Trump’s administration refused to grant sales permission under the Connected Vehicles Rule. This policy is part of Washington’s move to tighten restrictions on vehicles with links to China. The news immediately pressured Polestar’s stock, with the Nasdaq-listed company’s shares plunging 6.3% in trading on Thursday. The US Department of Commerce did not provide authorisation for Polestar to sell cars under the Connected Vehicles Rule. The regulation prohibits the import and sale of vehicles using connected vehicle technology with links to China starting from the 2027 model year. Technologies affected by the rule include Bluetooth, Wi-Fi, cellular connectivity, and certain satellite communication technologies. The US government assesses that these features could potentially collect sensitive data from vehicle owners in America, posing a risk to national security. The rule was first enacted in January 2025 under President Joe Biden and has been maintained under the Trump administration. This latest step strengthens US efforts to limit the entry of cars manufactured or exported from China, in line with Washington’s policy to bolster the domestic automotive industry. A number of US lawmakers have even proposed stricter rules, while Chinese-made electric vehicles are also subject to high import tariffs. Polestar, which is based in Sweden and majority-owned by China’s Geely Holding, stated it will continue to sell existing stock of the Polestar 3 and Polestar 4 in the US. The company also confirmed its after-sales service network will remain operational. However, Polestar has decided not to appeal the rejection. Polestar had warned since 2024 that the connected vehicle rule would effectively ban the company from selling cars in the United States, including vehicles manufactured domestically. ‘The automotive industry is entering a new phase based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and plans to produce the Polestar 7 in Europe,’ said Polestar CEO Michael Lohscheller. Polestar is now increasingly focusing its business on the European market after sales in the United States continued to slump due to intensifying competition and a slowdown in consumer spending. In the first quarter, only 6% of Polestar’s sales came from the US market, while 78% originated from Europe. The company is still struggling to turn a profit, having received capital injections several times from its main shareholder, Geely, and Chairman Li Shufu. Polestar’s share price has remained under pressure, forcing the company to conduct a reverse stock split last year to maintain its listing status on the Nasdaq.