Blocked from sales south of the border because of its Chinese ownership, EV brand confirms decision will not affect sales here

Polestar has been banned from selling its electric vehicles in the U.S. from the 2027 model year on because it is owned by the Chinese automaker Zhejiang Geely Holding Group. 

The decision, however, will not affect Polestar sales in Canada, according to the automaker.

The move south of the border is a result of the Connected Vehicle Rule enacted in 2025, restricting vehicles with hardware and software linked to China or Russia. Enforced by the Bureau of Industry and Security under the U.S. Department of Commerce, the law states:

• Model Year 2027: Prohibits sales of connected vehicles by connected vehicle manufacturers owned by, controlled by, or subject to the jurisdiction or direction of China or Russia, and vehicles using their covered software.
• Model Year 2030 (or January 1, 2029, for non-model-year components): Prohibits the imports of VCS [Vehicle Connectivity System] hardware from companies owned by, controlled by, or subject to the jurisdiction or direction of China or Russia.

Polestar had been seeking authorization to continue sales in the U.S. by the Department of Commerce, but was denied. 

‘Business as normal’

The Sweden-based automaker issued a statement saying it will sell its existing stock of vehicles in the U.S. and will also continue to support and service its customers. 

Losing the large U.S. market, however, doesn’t mean Polestar is leaving North America. A spokesperson for Polestar Canada confirmed the automaker will continue to sell its vehicles here. 

“Canada is not impacted by this decision,” said Michael Ofiara, director of communications of the Americas for Polestar. 

“They will continue business as normal. Canada now has a three-car lineup once again with the recent return of Polestar 2, alongside Polestar 3 and Polestar 4.”

Opportunities to grow

Michael Lohscheller, the CEO of Polestar, also confirmed in a press release that the automaker remains committed to Canada.

“Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches [also] taking place in Europe this year,” said Lohscheller.

“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.”

Polestar sold a company-high 60,119 vehicles globally last year. The U.S. makes up around 6 per cent of those sales.

Reliable partner

While the automotive world waits for the repercussions from this unprecedented decision, James Carter, principal consultant at Vision Mobility, notes Polestar’s decision to remain in Canada sends a clear signal.

“This is actually good … it positions Canada as a reliable partner for other OEMs.”

Polestar builds the Polestar 3 in Ridgeville, South Carolina, in a factory it shares with Volvo. It had moved production there in 2024 from Chengdu, China, to avoid steep U.S. tariffs on Chinese-built vehicles. 

Polestar has not commented on whether it will move its U.S. production as of yet.

Volvo also has a Chinese majority owner in Zhejiang Geely Holding Group, yet the brand was given authorization by the U.S. government to continue selling its vehicles there. No reason was given for the difference in decisions.

The two automakers have close ties. Polestar began as Volvo’s performance division before breaking off to become a standalone brand in 2017. Today, Volvo still owns 19.9 per cent of the EV carmaker.