Polestar, the electric Volvo spin-off is being forced to abandon the US market after the Trump Administration’s Commerce Department refused it permission to continue selling new cars, making the company the first casualty of the the Connect-Car Rule that bans foreign-made cars with certain connected software and hardware, but is being seen as a sweeping American clampdown on Chinese technology in vehicles. Polestar is part Chinese-owned.

The decision is the opening blow from a rule designed to strip Chinese-written software out of any new car that connects to the internet, says Business Matters, a measure Washington frames as shutting the door on the cameras, microphones and GPS systems that it fears could be turned into surveillance tools by a hostile state. For Britain’s small and medium-sized suppliers watching the trade winds, it is a pointed reminder that ownership and code, not just where a car is bolted together, now decide market access.

Polestar, which is controlled by the Chinese motoring giant Zhejiang Geely Holding Group, had applied to carry on selling under a waiver process written into the rule. The government turned it down, the company confirmed on Thursday. The Commerce Department did not immediately comment.

The brand said it would keep selling its remaining American stock and would honour servicing and repairs through its existing network, leaving current owners covered even as the shutters come down on new sales.

Drawn up under the previous Biden Administration, the “connected vehicle” rule restricts the import or sale of cars whose hardware and software are tied to China, on national-security grounds. The final rule took effect in March 2025 and has been carried forward rather than unpicked by the current White House.

Carmakers were given until March of this year to certify to the US Government that their products carried no code written in China or by a Chinese company, or else to petition for authorisation to keep selling from the 2027 model year onwards.

(Picture: Yay Images)