Polestar announced on Thursday that it is pulling out of the U.S. new vehicle market after being denied a waiver under a Biden-era connected vehicle regulation enacted a week before Trump took office, which bans connected vehicle technology “designed, developed, manufactured, or supplied by persons with a sufficient nexus to the PRC or Russia.”
Polestar was spun off from Volvo in 2017 and are both are owned by the Zhejiang Geely Holding Group. The brands share vehicle platforms and production lines, including a factory in South Carolina. Volvo was granted a waiver in May and neither automaker has explained the discrepancy.
Along with the American-made Polestar 3, the electric automaker’s other models have been sourced China and South Korea.
“Connected vehicles yield many benefits, but software and hardware sources from the PRC and other countries of concern pose grave national security risks. Today, we are taking strong action to protect Americans against these national security risks by safeguarding our critical infrastructure and automotive supply chain. President Biden has been clear: we will not hesitate to take needed action to protect the safety of the American people,” Biden’s National Security Advisor Jake Sullivan said at the time the rule was put into effect.
Polestar said it will refocus on the European market, which accounted for nearly 80% of the 13,126 vehicles it sold globally in the first quarter of this year. It has not yet confirmed if it will continue building the Polestar 3 in the U.S. for export.
The restriction affects 2027 model year vehicles Polestar will continue to support existing owners, as its sales and service operations are integrated with Volvo’s.
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