Own a US EV dealership has been a wild ride in the 2020s.

Since Polestar Short Hills opened in northern New Jersey in 2021, it has endured a Covid-era demand surge and an EV shortage that left some used EVs with higher valuations than new ones; a new federal tax credit of up to $7,500 that brought a new wave of drivers; lower sales volumes after the reversal of that federal tax credit and the elimination of a state one; and then another wave of buying as EV-curious drivers began fleeing Elon Musk’s Tesla due to the CEO’s involvement in the Trump administration.

Now, Matthew Haiken, who owns that 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 an authorization that would have allowed the brand to continue selling cars in the U.S. despite a federal rule restricting the sale of vehicles with Chinese-made connected vehicle technology. The company, majority owned by China’s Geely Holding and its founder Li Shufu, says it will stop selling Polestar vehicles in the U.S. starting with the 2027 model year.

“It’s very unfortunate,” Haiken says. “It’s hard for my clients who have been reaching out; it’s hard for my staff.” He says he and the owners of the other 31 Polestar dealerships in the United States have invested “many millions” in selling the cars and called the authorization decision “a shock to me and to all the dealers.”

Volvo, which is also majority owned by Geely, received clearance from the Commerce Department in March, allowing it to continue selling its vehicles in the United States despite its connections to China. Volvo said at the time that it had “constructive discussions” with the department 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 frustrated at Polestar globally,” Haiken says. “I think they really dropped the ball and I blame them. I don’t blame the government.”

The Commerce Department under the Biden Administration officially approved the connected vehicle rule in January 2025, after government officials argued that a ban on Chinese- and Russian-made automotive hardware and software was necessary for national security reasons. The federal government said Internet-connected car cameras, microphones and GPS equipment threatened U.S. security. “It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of American citizens,” Commerce Secretary Gina Raimondo said at the time.

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

Polestar said in a statement last week that U.S. dealers would sell “existing stock” of Polestar 3 and Polestar 4, and that a U.S. service network would “continue to support customers.” It framed the move as “an increase in its strategic focus on Europe” and said 94 percent of Polestar sales in the first quarter of 2026 were outside the US.

Haiken calls that 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 U.S. 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 service electric vehicles. “We have the volume to justify it,” he says. “We have to be there to do that work.” Not all dealerships may make the same decision, he said, although vehicles will likely be sent to the nearest service center for adjustments and repairs.