Critical Shifts:
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Disputed Denial: Polestar is challenging a U.S. Commerce Department ban on its 2027 models, pointing out that sister brand Volvo was approved despite sharing ownership, tech, and a South Carolina plant.
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U.S. Market Exit: Polestar will not appeal, shifting focus to other global markets while U.S. dealers clear remaining inventory.
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Dealer Lawsuit Impact: Polestar's pushback directly counters a $25 million lawsuit alleging the EV maker used federal regulations to bypass its U.S. dealer obligations.
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Polestar is challenging the U.S. Commerce Department’s decision to block the automaker from selling new vehicles in the U.S. beginning with the 2027 model year, saying it has not received a clear explanation for why its request was denied while Volvo was approved. The Wall Street Journal reported on an Aug. 18 letter Polestar sent to U.S. dealers outlining its efforts to remain in the market.
The EV company said it went through multiple rounds of discussions with Commerce and believed approval was likely. The company also proposed additional safeguards, including tighter data controls, reporting requirements and independent cybersecurity reviews. Commerce approved Volvo’s application in May but rejected Polestar’s in June. Polestar points out that both brands are owned by Geely and that the Polestar 3 and Volvo EX90 share significant technology and are built at the same South Carolina facility.
In the letter, Polestar U.S. executive Peter Wexler said the company is “currently focusing on getting the attention of (the Commerce Department) to obtain the requested information and to understand the underlying basis for the denial.” Polestar has also told Commerce that the different treatment of the two brands was “contrary to law.”
Polestar says it will not appeal the decision and plans to focus on other markets while U.S. dealers sell remaining inventory.
The development could potentially become relevant to the $25 million lawsuit filed by New Jersey Polestar dealer Prestige Imports. Prestige alleges Polestar used the federal restriction to facilitate its U.S. exit and avoid its dealer obligations. Polestar’s account presents a different picture, saying it actively sought approval and offered ways to address Commerce’s concerns. The timeline could become important as the lawsuit examines whether Polestar was forced from the U.S. market or had already decided to leave.
