The Polestar 4 is one of several new models the Volvo-related brand will no longer bring to the U.S., based on a federal rule restricting sales of cars with connected-vehicle technology linked to China.© 2026 Bloomberg Finance LPIn what is by all accounts an unprecedented move, the federal Department of Commerce is blocking Volvo’s Polestar subsidiary from importing its cars in the U.S. at the end of the current model year. While Volvo remains a Swedish brand, the company is majority-owned by China's Geely Holding (the parent company of Geely Auto), and therein lies the problem.Enacted in 2025 during the final days of President Biden’s term to help strengthen the domestic auto industry, and now enforced by the Trump administration, the Connected Vehicles Rule puts the kibosh on the import and sales of cars with connected-vehicle technology linked to China or Russia starting with the 2027 model year.Though Volvo had been granted the ability to continue selling its full line of cars in the U.S. in May, Polestar was not given the same privilege, and as a result says it will effectively exit the U.S. market following the 2027 model year. In the meantime, reports say the company will consolidate production of its Polestar 3 model at its South Carolina plant, and halt the import of models imported from its Chengdu, China facility. The automaker is expect to continue selling its existing stock of Polestar 3 and Polestar 4 models in the U.S. and will continue to service previously-sold units. The company had planned to introduce the new Polestar 7 and a Polestar ‌4 variant beginning later this year, followed by a revamped Polestar 2 sedan in 2027. The Polestar 5 sedan and Polestar 6 roadster the company also had in the works will likewise not reach American shores.Polestar, however, will still continue to build vehicles and sell them elsewhere in the world, with 94 percent of its first-quarter sales transacted outside of the U.S. according to company data, and nearly 80 percent of sales occurring in Europe.MORE FOR YOU"The automotive industry is entering a new phase, based on regional dynamics. Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe,” according to a statement made by Polestar CEO Michael Lohscheller. “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."This puts yet another damper on the ability for Chinese-built cars in the U.S., especially their highly-regarded full-electric models which are already subject to market-crushing tariffs, with legislators reportedly considering additional restrictions.