Polestar announces withdrawal from US in 2027... Volvo survives in America

Polestar, the Swedish premium electric vehicle manufacturer, has announced its withdrawal from the US market. The company has stated that the move is intended to focus on the European market, which accounts for 80% of its global sales, but the key factor lies in the regulations imposed by the US administration.

The US Department of Commerce's Bureau of Industry and Security (BIS) has tightened restrictions on the import and sale of vehicles equipped with connected vehicle technology linked to China. This measure stems from concerns that data collection via Bluetooth, Wi-Fi, cellular, and satellite communication technologies installed in vehicles could negatively impact national security. The regulation is known as the 'Connected Vehicles Rule'.

Polestar, whose majority shareholder is the Chinese Geely Group, had anticipated and prepared for such variables since 2024. Consequently, it is understood that the final decision to withdraw was confirmed after the BIS prohibited the sale of Polestar models from the 2027 model year onwards in the US.

Polestar had been producing the large SUV Polestar 3 in the US market, while the mid-sized Polestar 4 was imported and sold from production at the Renault Korea plant in Busan. Polestar will continue to sell its existing inventory of vehicles in the North American market and will provide ongoing local customer support services.

The impact of this sales ban on Polestar's long-term financial structure may be limited. Polestar has stated that the US market accounted for only 6% of its total sales in the first quarter of 2026. The company is expected to explore re-entering the US market in the future, while simultaneously developing new alternative markets with high growth potential outside North America.

Meanwhile, Volvo, the Swedish brand also under the Geely Group umbrella, reportedly received approval from the Department of Commerce in May to sell its vehicles in the US. The specific reason why only Polestar was excluded from approval within the Geely Group lineup has not been disclosed. As the Department of Commerce's vehicle sales approval regulations must be renewed annually, there is potential for changes in the future.

Renault Korea began production of the Polestar 4 for North American export in September 2025. Cumulative export volumes from the start of production up to May 2026 amount to approximately 4,000 units. This measure has made it inevitable for Geely Group to revise its strategy of avoiding US tariffs on Chinese-made cars through Korean production, and it is anticipated that production volumes of the Polestar 4 at the Renault Korea Busan plant will be adjusted downwards.

In the domestic market, the launch of the large SUV Polestar 3 is planned. It is an 800V-based pure electric vehicle sharing the SPA2 platform with the Volvo XC90. It will be launched in dual-motor and performance specifications, with electric motors on the front and rear axles, and will be equipped with CATL's 106kWh lithium-ion battery.

According to data certified by the Ministry of Environment, the single-charge driving range for the dual-motor specification is 517km city, 448km highway, and 486km combined at standard temperature; and 421km city, 443km highway, and 431km combined at low temperature. The performance specification has been certified with a range of 465km city, 405km highway, and 438km combined at standard temperature; and 343km city, 404km highway, and 370km combined at low temperature.

The dual-motor specification delivers a combined total output of 544 horsepower and maximum torque of 75.46 kgf·m, while the performance specification offers a combined total output of 680 horsepower and maximum torque of 88.81 kgf·m.

Currently, the Polestar 3 is in mass production at the Chengdu plant in China and the South Carolina plant in the US. Considering that the Polestar 2 and Polestar 4 currently on sale domestically are entirely produced in China, it is highly likely that the Polestar 3 to be introduced domestically will also be imported from Chinese production.