Polestar has officially waved the white flag in the US market, leaving one of the largest markets on the planet. Nevertheless, the whole situation has a somewhat ironic flavor.
According to the latest reports from the Wall Street Journal, the Chinese-backed automaker will not challenge the US government’s decision to ban future sales of its vehicles. The move effectively sees the Swedish electric vehicle brand exit one of the world’s largest auto markets. Rather than appeal the Commerce Department’s decision or seek redress in court, Polestar said it would shift its focus elsewhere. “We will focus our investments on markets where we have a strong position and the ability to grow profitably, with a strong focus on Europe,” brand spokesman Michael Ofiara told the WSJ.
Ofiara added that they had had “extensive dialogue” with US authorities and concluded that the appeal would likely not be successful. The US Department of Commerce’s decision to ban sales stems from new security rules for connected vehicles, which ban the use of Chinese software in internet-connected cars starting with the 2027 model year. US authorities have argued that cameras, navigation systems and other connected technologies could pose a national security threat if they were monitored by foreign adversaries. The Polestar, which is majority-owned by Chinese giant Zhejiang Geely Holding Group, was denied a special resale permit, while Volvo, also under the Geely umbrella, received this approval earlier this year after demonstrating proper data and cybersecurity management.
The whole situation has a rather ironic twist, as Polestar no longer sells cars made in China in the United States. The Polestar 2 was pulled from the market immediately after tariffs were imposed on Chinese electric vehicles, while the new Polestar 3 is being built in the US state of South Carolina, on the same assembly line as the Volvo EX90 (which is sold in the US as normal). To top it all off, their latest Polestar 4 is being built in South Korea.
This radical withdrawal could, of course, hit existing American owners of the brand hard. The departure of Polestar is expected to deal a severe blow to the resale values of used cars. This is already happening in practice, as the company is rapidly clearing existing inventory with aggressive discounts, which according to the latest information reach an almost incredible 22 thousand euros per individual car.
