After seven years selling cars in the U.S., electric carmaker Polestar will leave the American market at the end of 2026. The culprit isn’t slow sales, but rather Polestar’s ownership structure. Despite being headquartered in Sweden, Polestar, like sister brand Volvo, is owned by Geely, a Chinese auto conglomerate.
This is a problem because there is a rule in the U.S. Commerce Department’s Bureau of Industry and Security that prevents some foreign assembled cars that use connected software and hardware from being sold in the U.S. The two main countries this rule applies to is Russia and China. The Polestar 2, 3, and 4 are all built in China, but two of those – the 3 and 4 (pictured below) – are built in South Carolina and South Korea, respectively, for the U.S. market. Despite this, the Commerce Department has declined to provide authorization for Polestar, hence sales of its cars will be banned beginning with the 2027 model year.
Polestar says its exit from the U.S. will allow the company to focus more on Europe, a market that accounts for the bulk of its sales.
In a statement to Car and Driver, Company CEO Michael Lohscheller said, “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 could return to the U.S. at some point in the future, but it would likely take an act of Congress to make it happen. Given the current environment, we don’t see legislative changes happening anytime soon. This decision doesn’t impact Canada, however, where Polestars will continue to be sold into 2027 and beyond.
In the meantime, Polestar’s 32 U.S. dealers will continue to support existing customers and sell through remaining inventories of the 3 and 4.
Interestingly, Volvo has been granted permission to continue selling its cars in the U.S., despite its Chinese ties. British sports car maker Lotus, which Geely owns 51 percent of, exports the Emira sports coupe to the U.S., but the Eletre, the brand’s first EV SUV, isn’t sold in the U.S. The point of origin explains the reason; the Emira is built in Lotus’ home base of Hethel, England, while the Eletre is assembled in China.
The newest Polestar is an updated 2 compact sedan, which went on sale in Canada earlier this month. Two all-new models, a mid-size sedan (5), and sports convertible (6), are expected to arrive in 2027.
Polestar sales for the most recent quarter (Q1 2026), were up seven percent over the same period in 2025, checking in at 13,126.
Photos courtesy of Polestar
