Polestar won’t be allowed to sell its electric vehicles model year 2027 and beyond in the US after the federal government denied the company’s request for authorization under a new rule banning vehicles with software from China.

In a press release, the company says the decision to retreat from the US follows a recent decision by the Department of Commerce’s Bureau of Industry and Security to not grant Polestar an authorization under the current Connected Vehicle Rule to sell vehicles from model year 2027 and beyond. The rule, which passed under the Biden administration, blocks the import and sale of any vehicle with software from “countries of concern,” which includes China. Polestar is owned by Geely, one of the largest automakers in China.

The rule covers everything that connects a vehicle to the outside world, such as Bluetooth, Wi-Fi, cellular, and satellite components. It also addresses concerns that technology like cameras, sensors, and onboard computers could be exploited by foreign adversaries to collect sensitive data about US citizens and infrastructure. And it bans China from testing its self-driving cars on US soil.

Polestar has been preparing for the rule to go into effect for more than a year. The automaker, which sells its Polestar 3 and Polestar 4 electric vehicles in the US, had predicted back in January 2025 that it would have to pull out of the US if it went into effect. The Polestar 3 is made in the US, at the automaker’s factory in South Carolina, while the Polestar 4 is assembled in South Korea.

The company says it will continue to sell its existing stock of vehicles to US customers, but will stop marketing and sales of its vehicles model year 2027 and onwards in the US.

“Supporting our customers remains our highest priority,” spokesperson Michael Ofiara said in a statement. “Existing Polestar owners and lease customers will continue to receive the same level of support and access to service as they do today. All existing warranties remain in effect and will continue to be honored in accordance with their terms and conditions.”

Polestar said that it would redouble its efforts in Europe, which already represents 80 percent of the company’s sales.

“The automotive industry is entering a new phase, based on regional dynamics,” Polestar CEO Michael Lohscheller said in a statement. “Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe. Our record sales in 2025 and the first quarter of 2026 show that we are making strong progress, with several new market launches taking place in Europe this year. In addition, we will continue to invest in markets where we have opportunities to continue to grow, like Southeast Asia, Eastern Europe, Latin America and Canada.”

Not every automaker linked to China is getting pushed out. Volvo, which is also majority owned by Geely, was recently granted authorization to continue selling its vehicles in the US.