When the law kills your electric car dealership

Owning the United States Selling electric cars has been a wild ride in the 2020s.

Since Polestar Short Hills opened in northern New Jersey in 2021, it has seen a COVID-era surge in demand and a shortage of EVs, leaving some used EVs with higher valuations than new ones; A new federal tax credit of up to $7,500 brought a new wave of drivers in the door; Decreased sales volumes following rollback of the federal tax credit and elimination of the state tax credit; Then another wave of buying when drivers interested in electric cars started fleeing Elon Musk’s Tesla due to the CEO’s involvement with the Trump administration.

Now, Matthew Hayken, who owns the Polestar dealership along with three other (non-Polestar) dealerships in the Prestige Collection Auto Group, faces another, more serious challenge. Polestar said in late June that the U.S. Commerce Department had denied a license that would have allowed the brand to continue selling cars in the United States despite a federal rule restricting the sale of vehicles equipped with Chinese-made connected vehicle technology. The company, majority owned by China’s Geely Holdings Ltd and its founder Li Shufu, says it will stop selling Polestar vehicles in the United States starting in 2027.

“It’s very unfortunate,” says Hayken. “It’s hard for my customers who reach out to me, and it’s hard for my employees.” He says he and the owners of 31 other Polestar dealerships in the United States have invested “several millions” in selling the cars, and describes the licensing decision as “a shock to me and all the dealers.”

Volvo, in which Geely holds a majority stake, received clearance from the Commerce Department in March, allowing it to continue selling its cars in the United States, despite its Chinese ties. Volvo said at the time that it had “constructive discussions” with management about the automaker’s “governance, technology and data security.” (When asked about the discrepancy, a Polestar spokesperson said the company “cannot comment on how the legislation applies to other manufacturers.”)

“I’m very disappointed with Polestar globally,” says Hayken. “I think they really dropped the ball, and I blame them. I don’t blame the government.”

The Biden administration’s Commerce Department formally approved the Connected Vehicles Rule in January 2025, after government officials said a ban on Chinese and Russian-made auto hardware and software was necessary for national security reasons. The federal government has said that car cameras, microphones, and Internet-connected GPS devices threaten the safety of the United States. “It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to our national security and the privacy of American citizens,” Commerce Secretary Gina Raimondo said at the time.

The US Department of Commerce did not respond to WIRED’s questions.

Polestar said in a statement last week that U.S. dealers will sell “existing inventory” of the Polestar 3 and Polestar 4, and that the U.S. service network “will continue to support customers.” It framed the move as “increasing its strategic focus on Europe,” and said 94 percent of Polestar’s first-quarter 2026 sales were made outside the United States.

Haiken calls this statistic misleading because the brand’s newest offering, the Polestar 4 Coupe, went on sale in Europe in January 2024 but wasn’t available in the US until December 2025.

Some Polestar dealers handle service issues through Volvo centers, but Haiken said its independent Polestar service center will continue to repair and maintain EVs. “We have the size to justify it,” he says. “We have to be there to do the work.” He said not all dealerships may make the same decision, although vehicles will likely be sent to the nearest service center for adjustments and repairs.