Polestar will not appeal US sales ban, leaving dealers uncertain

Polestar (PNSY) will not appeal a U.S. government decision that prevents it from selling future vehicles in the country and will instead focus on other markets, The Wall Street Journal reported on Monday, citing the company.

The decision has created uncertainty for Polestar’s U.S. dealers, who have invested in showrooms, staff training, and efforts to build the brand in the competitive luxury EV market.

Polestar (PNSY) spokesman Michael Ofiara told the WSJ that the company had discussions with U.S. officials but did not believe an appeal would be successful. The company said it would continue selling its remaining U.S. inventory and supporting existing customers.

Some dealers said they were surprised by the decision and wanted more information from Polestar. Matthew Haiken, president of Prestige Collection Auto Group, said he had paused the construction of a planned Polestar (PNSY) dealership in New Jersey after spending millions on the project.

The U.S. Commerce Department’s decision was linked to concerns over data security in internet-connected vehicles. The move is part of broader U.S. rules restricting certain Chinese software in connected vehicles from the 2027 model year.

Volvo, which shares ownership links with Polestar (PNSY) through China’s Zhejiang Geely Holding Group, received approval to continue selling vehicles in the U.S.

Polestar (PNSY) sold 5,747 vehicles in the U.S. last year, accounting for about 6% of its global sales. The company is offering discounts of up to $25,000 on remaining U.S. stock as it manages its exit from future U.S. sales.

Shares were trading around 1.7% lower on Monday.