Cnet reported on 27/6 that the Bureau of Industry and Security, under the US Department of Commerce, will not license Polestar to sell new vehicle models from 2027. This decision stems from concerns over connected technology manufactured in China. The core issue is Polestar's ownership; it is part of Volvo, which Chinese company Geely acquired from Ford in 2010.

A Polestar 5 electric vehicle on display at the Everything Electric North exhibition in Harrogate, England, on 8/5. *Photo: Reuters*

Following the US government's decision, Polestar announced its withdrawal from the US market, shifting production to Europe. In the US, the company will continue to sell its existing inventory of Polestar 3 and Polestar 4 models and support customers through its service network. Polestar had been preparing for the launch of its new Polestar 7, a premium compact SUV, originally slated for 2028. However, due to the recent ban, a company representative confirmed that this model would not be sold in the US as initially planned.

Michael Lohscheller, Polestar's chief executive officer, stated that shifting production to Europe aligns with the company's strategy. He noted that nearly 80% of current sales originate from Europe. Polestar will also continue to invest in emerging markets such as Southeast Asia, Eastern Europe, Latin America, and Canada. The company representative further highlighted that 94% of their retail sales are generated outside the US market.

While the ban on Polestar has not yet been officially published on the Department of Commerce's website or social media, it aligns with the agency's broader directives concerning the control of technology originating from China. This month, the department imposed a 36 million USD fine on Bosch for exporting automotive sensors and software to Huawei. In the automotive sector, the US enacted the connected vehicle regulation in early 2025. This regulation aims to restrict the import and sale of vehicles featuring connected technology linked to China, effective for models produced from the 2027 model year onwards.

This regulation specifically targets technologies such as bluetooth, wi-fi, cellular connectivity, and certain satellite communication systems. The concern is national security, stemming from the potential for these technologies to collect data from American vehicle owners. This initiative represents a major step by the US government towards prohibiting Chinese vehicles, as Washington seeks to bolster its domestic automotive manufacturing industry.

Polestar had anticipated this decision since 2024. The company sent a formal letter to the Bureau of Industry and Security, cautioning that a potential ban could force it to halt vehicle sales in the US, despite some vehicles being manufactured in South Carolina. Polestar is not ranked among the top 10 electric vehicle manufacturers, with its sales volumes trailing behind industry leaders such as Tesla, BYD, and Volkswagen.

According to market analysis firm Edmunds, electric vehicles constitute approximately 6,5% of the US automotive market. EVs in the US generally carry higher price tags, and President Donald Trump has rescinded electric vehicle incentive policies. While rising gasoline prices this summer might prompt consumers to reconsider EVs, concerns regarding cost and range persist.

US authorities are extending their focus beyond the automotive industry. The Federal Communications Commission (FCC) has also targeted consumer products, including routers and drones, that incorporate Chinese-manufactured technology.

By Bao Bao (Sources: Cnet, Reuters)