Polestar 4 electric vehicle. (Erika Gerdemark/Bloomberg)
key takeaways:
- Polestar was denied authorization to sell future models in the US starting next year under connected-vehicle rules targeting Chinese technology.
- Bloomberg Intelligence analysts said about $250 million of revenue could be at risk in 2027, equivalent to about 5% of group sales.
- Polestar said it will continue to sell existing inventory, service customers and accelerate its transition to Europe while preparing for regional production.
Polestar Automotive Holdings UK was denied authorization to sell future models in the US from next year under connected-vehicle rules aimed at limiting Chinese technology.
Polestar, which is backed by Zhejiang Geely Holding Group, said in a statement that it will continue to sell existing inventory of its Polestar 3 and Polestar 4 electric vehicles and service existing customers.
The Swedish company said US policy will accelerate its pivot towards Europe as it prepares to build future models in the region. Polestar American Depositary Receipts fell nearly 6% on June 25 following the statement.
The rules introduced by the Biden administration are designed to block vehicles with Chinese software, hardware or ownership ties on national security grounds. Chinese cars also face punitive tariffs, including a 100% import tax on EVs.
The decision on Polestar comes after Volvo Car AB last month received US authorization to continue importing and selling connected vehicles while it is effectively controlled by Geely founder Li Shufu.
Europe accounts for about 80% of Polestar sales, while 94% of first-quarter deliveries came from markets outside the US, the company said.
“Polestar’s inability to sell U.S. model year 2027 vehicles under the connected-vehicle rule could put approximately $250 million of 2027 revenue at risk,” said Michael Dean, senior European automotive analyst at Bloomberg Intelligence, and Giacomo Regelin, senior associate analyst. “Yet this amounts to around 5% of group sales. Focusing on Europe also appears to make sense strategically as Polestar could redirect South Korea-made Polestar 4 vehicles from the US to Europe, thereby avoiding EU tariffs on China-made EVs.”
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“We will continue to invest in markets where we have opportunities to grow,” said Michael Loescheller, former CEO of Nikola and CEO of Polestar.
According to an emailed statement, Geely Holding supported Polestar’s management.
“While specific market access challenges may arise, ZGH has full confidence in the boards and management of our portfolio companies as they explore all available avenues to serve their customers around the world,” Geely said.
The Polestar 3S for the US market is assembled at Volvo’s plant in Charleston, SC. A Volvo spokesperson said it was too early to speculate about any impact, adding that previously announced investments in the Charleston plant would remain unchanged.
