- Polestar won’t appeal the US ban ending sales after the 2027 model year.
- Volvo secured an exemption, but Polestar won’t pursue the same route.
- America accounted for just 6% of Polestar’s global sales last year.
Polestar will soon bid farewell to the United States and instead focus on markets where its models are more popular. That’s bad news for customers across the country, and worse news for the 32 Polestar dealerships operating here.
The US Department of Commerce’s Bureau of Industry and Security said last month that it would not allow Polestar to sell new cars in the country beyond the 2027 model year, citing the company’s Chinese ownership and technology.
Read: Polestar Owners Fear A Fisker-Style Resale Collapse After US Ban
Polestar could have contested the decision and pushed government officials for an exemption like the one granted to Volvo. If that failed, it could have gone to court. Despite having those options, Polestar says it won’t appeal the ban.
“We will instead focus our investments on markets where we have a strong brand position and ability to achieve profitable growth, with a strong weighting towards Europe,” Polestar spokesman Michael Ofiara told the Wall Street Journal.
Last year, Polestar sold a measly 5,747 vehicles in the United States, even though the Polestar 3 and Polestar 4 are both excellent cars. With numbers that thin, the US accounted for just 6 percent of the company’s global sales, and it’s entirely possible the brand would have walked away before long even with permission to keep selling.
The Dealer Fallout
Dealerships are now left holding the bag. Many Polestar dealers, who frequently sell Volvo models too, have spent millions building out facilities for the EV-focused brand, presumably hoping it might one day grow into a serious volume seller to rival European rivals and maybe even Tesla.
One dealer owner, Matthew Haiken, told the WSJ he had sunk “millions” into a new Polestar dealership in East Hanover, New Jersey, only to pause construction last month when the ban was first announced. Learning that Polestar won’t appeal the decision, he said, is “really upsetting to hear.”
How the company plans to make things right with dealers is still unclear. According to New York attorney Russell McRory, state laws often require manufacturers to compensate dealers when they exit a market, and the usual way to sidestep that obligation is bankruptcy. Polestar says it will work with dealers to “manage this transition,” but hasn’t offered specifics.
Deals On The Way Out
Now that it’s heading for the exit, Polestar wants the stock gone, and earlier this month it put real money on the hood of the Polestar 3 and 4. The discounts run as deep as $25,000, though buying from a brand on its way out of the country carries obvious risk. The saving grace is that Polestar isn’t going under. It stays in business everywhere else, and its US service centers will remain open to look after the cars already sold.
“We will continue to sell our existing stock of vehicles in the U.S., and our retailers will continue to support customers through sales, service and aftersales activities,” a press spokesman told the publication.
