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Polestar’s upcoming ban on sales in the US was announced on June 25, and the matter has become even more complicated since then. First, a dealer group filed a lawsuit alleging that Polestar quietly used the ban as a route to pull out of the US market; now, a report by The Wall Street Journal says the Swedish-origin, Chinese-owned carmaker believes it was misled by federal officials.

According to an August 18 letter to dealers reviewed by The Wall Street Journal, Polestar said it had not been given an explanation for why it was barred from selling cars in America starting in 2027. Company officials say the US Department of Commerce, which is responsible for enforcing the newly introduced rules covering Chinese-linked technology, had indicated in January 2026 that the Geely-owned manufacturer would be permitted to remain in the domestic market. However, shortly after Volvo was granted approval in May, Polestar was rejected, despite both companies sharing the same Chinese majority owner, Zhejiang Geely Holding Group.

“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,” Peter Wexler, Polestar’s US head of product, retail network and government affairs, said in the letter, according to the WSJ.

The letter also says Polestar responded to several rounds of questions in 2025, which Commerce officials allegedly said were satisfactory. In total, the agency carried out a 13-month review of the automaker and its data practices, while extending the review deadline four times. Then, in April 2026, Wexler says Commerce Under Secretary for Industry and Security Jeffrey Kessler told Polestar management that it would be reasonable to expect approval if Volvo was also approved. Polestar also says it repeatedly offered to discuss “mitigation measures” related to data storage and access. The Swedish carmaker even proposed independent cybersecurity assessments, but it was still denied two months later.

Polestar officials told Commerce Department representatives in a letter that the treatment it received was disparate and “contrary to law,” according to The Wall Street Journal. Even so, Polestar says it remains committed to not appealing the denial and will instead concentrate on sales in Europe. As a result, a group of dealerships in New Jersey has sued the automaker for $25 million, alleging lost revenue and violations of New Jersey’s Franchise Practices Act.

“I can confirm that we have sought clarification from BIS on the grounds of their decision. Our focus remains on ensuring continued support for existing Polestar customers. As you know, from MY 2027 onwards, we will not be allowed to sell new cars in the U.S.,” a Polestar spokesperson said to Road & Track.