US bans Polestar in latest blow to Chinese automakers

Geopolitical and regulatory risk are becoming core factors for investors assessing international companies.

Electric vehicle maker Polestar has been denied authorization to sell new vehicles in the U.S. from the 2027 model year, as Washington moves to restrict Chinese-linked automotive technology on national security grounds.

The decision means the Sweden-headquartered electric vehicle maker, which is majority owned by China's Geely Holding, will be unable to introduce future models into the U.S. market under the government's Connected Vehicle Rule.

The regulation, which was adopted in January 2025 under President Biden, restricts the import and sale of vehicles incorporating software or communications technologies linked to countries deemed national security risks, including China, beginning with the 2027 model year.

Existing Polestar 3 and Polestar 4 vehicles will continue to be sold while inventories last, and the company said it will maintain support for existing customers.

Polestar added that it would not appeal the denial.

The ruling represents another setback for Polestar as it seeks to strengthen its financial position following a challenging period marked by weaker demand for electric vehicles and slower-than-expected sales growth.

Although the company has manufacturing operations in the U.S. and South Korea, its Chinese ownership and technology links ultimately proved decisive under the new regulatory framework.

The decision also highlights the growing divergence between companies with similar ownership structures.

Volvo Cars, which is also backed by Geely, previously secured authorization to continue selling vehicles in the U.S. after demonstrating compliance with the connected vehicle requirements.

Polestar, by contrast, was unable to obtain the necessary approval, effectively closing one of the world's largest automotive markets to its future model lineup.

For shareholders, the decision reinforces the growing importance of geopolitical and regulatory risk when assessing internationally listed companies operating across multiple jurisdictions.

In Europe, proposed carbon reduction measures have prompted businesses to warn that tougher environmental rules could undermine competitiveness, while cryptocurrency exchange Binance has faced the prospect of losing access to parts of the EU market as regulators tighten oversight of digital asset firms.

Together, these cases illustrate how regulatory divergence is becoming an increasingly important factor in corporate strategy and shareholder value, in addition to more traditional factors such as product demand and financial performance.

Polestar Automotive Holding's stock was pre-market trading at $17.18 at 7:31 on Monday in New York, down 1.4% from Friday's closed. The stock is down 18.5% year-to-date.

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