A decision by the Bureau of Industry and Security effectively ends Polestar’s ability to introduce new models in the U.S. market starting next year.
- The company confirmed it will continue to support existing U.S. customers through its service network.
- Polestar has not indicated any plans to appeal the ruling or pursue alternative pathways to maintain new-vehicle sales in the American market beyond clearing existing inventory.
- In response to the ruling, Polestar said it is sharpening its strategic focus on Europe, which already accounts for close to 80% of its global retail sales.
Shares of Polestar Automotive Holding (PSNY) fell 13% on Thursday after the company said that it has been denied authorization by the U.S. Department of Commerce to sell vehicles in the United States from model year 2027 onward.
The decision by the Bureau of Industry and Security effectively ends Polestar’s ability to introduce new models in the U.S. market starting next year. The Swedish electric vehicle maker, majority-owned by China’s Geely Holding, will only be permitted to sell its remaining inventory of the Polestar 3 and Polestar 4 in the United States.
The company confirmed it will continue to support existing U.S. customers through its service network. Polestar has not indicated any plans to appeal the ruling or pursue alternative pathways to maintain new-vehicle sales in the American market beyond clearing existing inventory.
Polestar Pivots Focus
In response to the ruling, Polestar said it is sharpening its strategic focus on Europe, which already accounts for close to 80% of its global retail sales. The company plans to expand its European sales network and localize production of future models, including the upcoming Polestar 7 compact SUV, which is slated to be manufactured at Volvo Cars’ new factory in Kosice, Slovakia.
“The automotive industry is entering a new phase, based on regional dynamics,” said Polestar CEO Michael Lohscheller. “Our strategy reflects that, with Europe being our largest growth engine and our plan to manufacture Polestar 7 in Europe.” The company also said it will continue investing in other growth regions, including Southeast Asia, Eastern Europe, Latin America, and Canada.
The U.S. Connected Vehicle Rule is a national security regulation issued by the Department of Commerce’s Bureau of Industry and Security that restricts the import and sale of connected vehicles and related technologies that have significant ties to China or Russia.
How Did PSNY Retail Traders React?
On Stocktwits, retail sentiment around PSNY stock rose from bearish to neutral territory over the past 24 hours, while message volume remained at high levels.
A Stocktwits user highlighted that the announcement does not impact the business.
Another user blamed the Trump administration for “causing America to fall behind in the automotive industry.”
A third user said that the stock will likely bleed more.
According to data from Koyfin, one of the three analysts covering PSNY rates it ‘Hold’ while two rate it ‘Sell’ or ‘Strong Sell.’ The 12-month average price target on the stock is $17.50, representing a potential downside of about 13% from Wednesday’s close.
PSNY stock has lost 12% year-to-date.
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