Polestar says Volvo’s approved model is nearly identical to its Polestar 3
Polestar told its U.S. dealers the Commerce Department blindsided the electric-vehicle maker with a June 24 decision banning it from selling cars in the American market while allowing Volvo Cars — which sells a nearly identical vehicle — to remain, according to an Aug. 18 letter seen by The Wall Street Journal.
The letter provides Polestar’s first detailed account of its efforts to secure a waiver under a Connected Vehicles rule the Trump administration is implementing to prevent technology in U.S. cars, such as connected and GPS data, from being exploited by foreign adversaries including China and Russia. The rule originated during the Biden administration. The June 24 decision marks the first effective U.S. market ban of an automaker under the new regulation.
In the letter, Peter Wexler, Polestar’s U.S. head of product, retail network and government affairs, wrote that in April Commerce’s Under Secretary for Industry and Security, Jeffrey Kessler, told Polestar management it would be reasonable to expect that, if Volvo were approved, Polestar would be too.
Commerce officials approved Volvo’s application in May, before denying Polestar’s the following month, according to Wexler. The Volvo EX90 is “a car that is essentially (the) same as the Polestar 3 and that uses the same software stack,” Wexler wrote, noting that the two models are built on the same line at Volvo’s factory in South Carolina.
Polestar and Volvo Cars share the same Chinese majority owner, Zhejiang Geely Holding Group, according to the letter. The two automakers build two of their models on the same South Carolina production line with nearly identical hardware and the same software inside, Wexler said.
Polestar also sells the Polestar 4 in the U.S., which is manufactured in South Korea. The automaker contracted for South Korean production beginning last year, in part to avoid U.S. tariffs on Chinese electric vehicles.
Polestar answered multiple rounds of Commerce questions in 2025, after which Commerce officials said they were preparing to recommend Polestar’s approval, Wexler wrote. Polestar offered the agency multiple times to discuss “mitigation measures,” including restrictions on where data is stored, limits on who can access it, auditing and reporting requirements, and independent cybersecurity assessments, he said.
Polestar has told Commerce that the disparate treatment of itself and Volvo is “contrary to law,” according to Wexler. The company said it will not appeal the denial and will instead focus on European sales.
“In essence, we are currently focusing on getting the attention of (the Commerce Department) to obtain the requested information and to understand the underlying basis for the denial,” Wexler wrote.
Polestar remains a small player in the U.S. market. It sold fewer than 6,000 cars in the country last year, about 6% of its global sales. The ban affects cars from the 2027 model year onward, and Polestar is currently selling off its existing inventory at steep discounts.
The automaker’s nearly three-dozen U.S. dealers — most of whom are also Volvo franchisees — have demanded answers about the disparate treatment, and one is suing the automaker for at least $25 million in damages after investing to build a Polestar showroom.
“We are in dialogue with our dealers in the U.S. but will not comment on the specifics,” a Polestar spokesman said. A Commerce Department spokesman didn’t respond to a request for comment.