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What the U.S. rule prohibits
The Commerce Department’s Bureau of Industry and Security (BIS) finalized the Connected Vehicle Rule on January 14, 2025. It restricts certain information and communications technology and services (ICTS) used in vehicle connectivity systems (VCS) and automated-driving systems (ADS) when the technology or supplier has a sufficient connection to China or Russia.
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The rule is aimed at software and hardware designed, developed, manufactured or supplied by people or companies owned by, controlled by, or subject to the jurisdiction or direction of China or Russia when those items directly enable VCS or ADS functions. BIS says the policy is intended to keep Chinese and Russian vehicle software and hardware off American roads and protect the U.S. automotive supply chain.
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When each restriction takes effect
| Restriction | Effective point | What it means |
|---|---|---|
| Covered software and certain manufacturer-related sales restrictions | Model year 2027 | Vehicles cannot be sold if the applicable ICTS or manufacturer relationship falls within the rule and BIS authorization is not obtained. |
| Covered connected-vehicle hardware | Model year 2030 | Hardware prohibitions apply to covered VCS equipment in vehicles of that model year. |
| Vehicles without a model year | January 1, 2029 | The hardware prohibition uses this date instead of a model-year threshold. |
The software deadline arrives first, which is why Polestar’s U.S. sales authorization became the immediate issue even though the rule’s hardware restrictions begin later.
Why Polestar is caught by the policy
Polestar is headquartered in Gothenburg, Sweden, but contemporaneous reporting identifies the company as majority-owned by China-based Geely. That corporate connection can matter under a rule that examines more than final assembly location.
A vehicle assembled in the United States is not automatically outside the rule if covered connectivity or automated-driving technology remains linked to a restricted jurisdiction, or if the manufacturer relationship itself creates a covered nexus. Assembly country is therefore only one factor among several:
- The vehicle’s model year.
- Whether the affected technology is VCS or ADS software or VCS hardware.
- Who designed, developed, manufactured or supplied the technology.
- Whether the manufacturer is owned, controlled or directed by a covered jurisdiction.
- Whether BIS has granted authorization for the specific sales activity.
The public record does not identify a particular Polestar chip, server, operating system or data pathway as the reason for the decision. Polestar’s announcement confirms the authorization outcome but does not disclose BIS’s confidential, case-specific technical or ownership findings.
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What Polestar announced on June 25, 2026
Polestar said BIS had not granted authorization to sell its vehicles in the United States from model year 2027 onward. Reuters described the decision as effectively preventing Polestar from selling new vehicles in the country beginning with that model year.
Polestar also said it would continue selling existing Polestar 3 and Polestar 4 inventory and continue supporting customers through its service network. That distinction separates the rule’s prospective sales effect from an immediate action against vehicles already delivered or physically sitting in dealer inventory.
Can you still buy a Polestar?
Existing Polestar 3 and Polestar 4 stock
Yes, according to Polestar’s June 25 announcement. Existing inventory of those two models can continue to be sold, subject to normal dealer availability and applicable state and federal sales requirements.
New model-year 2027 vehicles
Polestar does not have BIS authorization to sell its vehicles in the United States from model year 2027 onward, according to the company. That makes the practical cutoff the transition to new model-year inventory rather than a particular recall date.
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Vehicles already owned
The announcement does not call for a recall or a shutdown of cars already on the road. Polestar says its service network will continue supporting customers, although the announcement does not specify how every future software, parts or warranty situation will be handled.
Does this ban all Chinese electric vehicles?
No. The Connected Vehicle Rule is technology- and relationship-specific. It can reach a vehicle with Chinese-linked software, hardware or corporate control, but it does not establish that every electric vehicle made in China or sold by a Chinese-linked company is automatically prohibited.
Each automaker and vehicle program would need to be assessed against the rule’s model-year dates, covered ICTS categories, jurisdictional nexus and any BIS authorization. The public announcement about Polestar should not be treated as a ruling on every other manufacturer.
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Final assembly answers where a vehicle was put together; it does not by itself answer who controls the company or where the systems enabling connectivity and automated driving originated. The rule’s structure allows those issues to be considered together.
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That is why a U.S.-assembled vehicle could still face a restriction if its covered technology or manufacturer relationship remains within the rule’s scope. Conversely, a vehicle’s brand label alone does not establish that it is prohibited.
What the policy means for Polestar’s U.S. business
The United States was already a minority market for Polestar. The company reported that close to 80% of retail sales volume was in Europe in 2026, and that 94% of first-quarter 2026 retail sales volume originated outside the United States. Those figures describe the company’s sales mix; they do not change the U.S. authorization requirement.
For American buyers, the near-term effect is a shrinking pool of new inventory as existing Polestar 3 and Polestar 4 vehicles are sold. For owners, the stated continuation of service support is more immediately relevant than the later hardware deadline. Longer-term product availability will depend on whether Polestar can obtain authorization or restructure the technology and corporate conditions that BIS considers covered.
Quick Recap
Timeline
- January 14, 2025: BIS finalizes the Connected Vehicle Rule.
- Model year 2027: Covered software and applicable manufacturer-related sales restrictions begin.
- June 25, 2026: Polestar announces that BIS has not authorized U.S. sales from model year 2027 onward.
- Model year 2030: Covered vehicle hardware restrictions begin.
- January 1, 2029: The hardware prohibition applies on this date to covered units that do not use a model-year designation.
What buyers and owners should check
- Confirm the vehicle’s model year rather than relying only on its build date.
- Ask the retailer whether the vehicle is existing inventory covered by Polestar’s June 25, 2026 announcement.
- Get written details on warranty, software updates and service availability before purchase.
- Do not assume that U.S. assembly alone determines eligibility.
- For an already-owned vehicle, contact Polestar’s service network for vehicle-specific support; the company has said support will continue.
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