Polestar is being forced out of the United States market at the end of the current model year.

The news follows a decision by the U.S. Department of Commerce’s Bureau of Industry and Security, which did not grant the Swedish automaker an exemption from the country’s Connected Vehicle Rule.

The U.S. regulation prohibits the import and sale of vehicles integrating hardware or software linked to China or Russia.

Polestar, a sibling brand of Volvo, is based in Sweden, but its owner, Geely Holding, is Chinese. Oddly, Volvo received the exemption to continue selling cars in the U.S. despite its Chinese connection.

What does this mean for Polestar’s U.S. customers?

Polestar will not be able to sell vehicles in the U.S. from the 2027 model year onwards.

The company said it will continue to sell its existing stock of Polestar 3 and Polestar 4 models.

It will also continue to support customers, including access to its service network.

U.S. accounts for fraction of Polestar’s sales

The automaker said nearly 80 per cent of its sales happen in Europe.

What’s more, through the first quarter of this year, about 94 per cent of the company’s sales happened outside the U.S.

More focus on Europe, Canada and elsewhere

The company is moving on from its U.S. presence and will put a greater focus on other markets, particularly Europe, but Canada and others as well.

“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,” Polestar CEO Michael Lohscheller said in a news release.

“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.”

Information on the company’s vehicles available here is available on the Polestar Canada website.

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