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Chinese tech rule blocks future Polestar U.S. models
EV maker says it will continue selling existing inventory of its Polestar 3 and Polestar 4 models and servicing existing customers
Key Takeaways:
- Polestar was denied authorization to sell future models in the U.S. from next year under connected-vehicle rules targeting Chinese technology.
- Bloomberg Intelligence analysts said about $250 million in 2027 revenue may be at risk, equal to about 5% of group sales.
- Polestar said it will keep selling existing inventory, service customers and accelerate its shift toward Europe while preparing regional production.
Polestar Automotive Holding UK was denied authorization to sell future models in the U.S. from next year under connected-vehicle rules aimed at limiting Chinese technology.
Polestar, which is backed by Zhejiang Geely Holding Group, said in a statement it will continue selling existing inventory of its Polestar 3 and Polestar 4 electric vehicles and servicing existing customers.
The U.S. policy would accelerate its pivot toward Europe while it prepares to manufacture future models in the region, the Swedish company added. Polestar American depositary receipts closed down about 6% on June 25 following the statement.
The rules introduced by the Biden administration are designed to block connected vehicles with Chinese software, hardware or ownership ties on national security grounds. Chinese cars also face punitive tariffs, including a 100% import tax on EVs.
The decision on Polestar comes after Volvo Car AB last month secured U.S. authorization to continue importing and selling connected vehicles despite also being effectively controlled by Geely founder Li Shufu.
Europe accounts for nearly 80% of Polestar’s sales, while 94% of first-quarter deliveries came from markets outside the U.S., the company said.
“Polestar’s inability to sell U.S. model year 2027 vehicles under the connected-vehicle rule may put about $250 million of 2027 revenue at risk," said Michael Dean, Bloomberg Intelligence senior European automotive analyst, and Giacomo Reghelin, senior associate analyst. "Yet that equates to only about 5% of group sales. A Europe focus also appears strategically sensible because Polestar could redirect South Korea-built Polestar 4 vehicles from the U.S. to Europe, avoiding EU tariffs on China-made EVs.”
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“We will continue to invest in markets where we have opportunities to grow,” said Polestar CEO Michael Lohscheller, a former Nikola CEO.
Geely Holding backed Polestar’s management, according to an emailed statement.
“While specific market access challenges may arise, ZGH is fully confident in our portfolio companies’ board and management as they explore all available avenues to serve their customers around the world,” Geely said.
Polestar 3s for the U.S. market are assembled at Volvo’s plant in Charleston, S.C. A Volvo spokesperson said it was too early to speculate on any impact, adding that previously announced investments at the Charleston plant remain unchanged.
