BEVERLY HILLS, CALIFORNIA - JUNE 26: A Polestar car is displayed in the showroom at a Polestar dealership on June 26, 2026 in Beverly Hills, California. Electric car maker Polestar will be barred from selling new vehicles in the United States starting with the 2027 model year after the Commerce Department cited national security concerns under new connected-vehicle regulations. (Photo by Justin Sullivan/Getty Images)Key TakeawaysPolestar faces U.S. sales ban from 2027. The decision disrupts its 32-dealership network, leaving dealers and owners uncertain about future operations and service support Dealers caught off guard. Some dealers were blindsided by the ban, while others anticipated it but saw their advice ignored. Volvo's potential role in transition. Despite complications, Volvo's network might assist with servicing, but there are roadblocks to selling remaining Polestar stock through Volvo dealers. Dealerships in limbo. Franchises are unsure about the future of their investments and facilities, with no clear plan in place. Bottom line: Polestar's unexpected U.S. sales ban creates chaos for dealers and owners, with uncertain plans for future operations and inventory management. ✦AI assisted, editor reviewedAdvertisementAdvertisementThe U.S. government's decision to ban Polestar from selling cars in America under a rule prohibiting Chinese technology has thrown the automaker's nascent 32-dealership network into chaos. Now dealers, owners, and Polestar's corporate teams are struggling to figure out how vehicle service, selling the remaining 2026 stock, and even disposing of real estate will work as the company is abruptly forced to wind down operations, according to multiple dealer sources who spoke with The Drive.This is an unprecedented situation. Brands come and go over the years, but even when automakers are shuttered for financial reasons, the writing is on the wall. This time, dealers say they weren't given any heads up that a decision was even imminent when Geely-owned Polestar shared the news last Thursday that the government had revoked its certification to operate in America.At least one is in the middle of constructing a flagship retail building that might never get used. Others say they saw it coming and their advice to turn the brand around was ignored. Frustrations are sky high, and flashes of anger are already obvious.A dealer that wished to remain anonymous for fear of retribution from Polestar told The Drive that there are still about 2,800 new Polestars inbound for the U.S. market. That would make most if not all those cars Polestar 4s, since the 2026 Polestar 3 wasn't sold in America as the automaker planned to skip to 2027 for that model.AdvertisementAdvertisement"What's the program on the car?" the source asked rhetorically regarding lease incentives. "We'll be selling these 2026s halfway through 2027. I have no clue what the consumer demand is going to be on these, it's going to just have to be the cheapest lease and risk it. I don't know who else is going to sign up for it. There's no appetite for the cars when there's no brand to support it. Seems like way too many cars on the ground here for us to ride out.""We don't know what we are doing. We can't pull the levers that fast!" the source added. "What are we doing with hundreds and hundreds of thousands of dollars worth of fixtures?"Adding to the frustrations is the fact that Volvo, which Polestar spun out from in 2017 and is also owned by Geely, did receive authorization to continue selling cars here earlier this spring despite its ties to China. As such, Volvo's dealer network is an obvious fallback to handle Polestar service or even helping to sell the remaining inventory, but even that is fraught with complications. Polestar has been forbidden from selling cars at Volvo dealerships since it was established as an independent company. A Polestar and Volvo dealer can share the same campus, and Volvo dealers can service Polestar's cars, but the showrooms must be in separate buildings.To spotlight one example of how messy this is becoming, a Polestar enthusiast and owner reached out to The Drive and provided an email sent on Friday by Polestar Los Angeles General Manager Reza Fatemi, 24 hours after Polestar announced the ban. The email states that the dealership, which is owned by Galpin Motors, would be relocating to Galpin's Volvo location "to serve you even better." A similar notice was pinned to the top of their website as of Wednesday.Email to Polestar Los Angeles customer on June 26, 2026Galpin Volvo just completed a massive renovation last year and doesn't have much room to construct a new building for Polestar on its lot, so it's unclear how it will work. We reached out to Fatemi for comment but he declined to take our call, though on Tuesday a salesperson confirmed the move was happening.Email to Polestar Los Angeles customer on June 30, 2026Tuesday night the Polestar enthusiast and owner received an email from Polestar Los Angeles with an "urgent update" stating that as of today, July 1, 2026, Polestar Los Angeles "will be consolidating our sales operations into our Galpin Volvo campus in North Hills." The email also stated that the Beverly Hills showroom will close, and all sales, inventory, and staff will relocate to North Hills.AdvertisementAdvertisementGiven the highly-charged nature of all of this, this didn't sit well with our anonymous source."A year ago we went to Polestar and said this isn't working and we should fold into Volvo. Polestar was for it, and Volvo wasn't on board. Can't believe Volvo is going to allow this [now]," they said. "We are operating as status quo that's not status quo, unfortunately. I would've loved to do this a year ago, we knew the brand wasn't going to make it. It should've never left Volvo," the dealer source said.Galpin-owned Polestar Los Angeles homepage as of June 30, 2026The Drive also spoke with Matthew Haiken, president and CEO of Prestige Auto Collection Group, which includes a Volvo dealership, Lincoln dealership, and Polestar dealership in New Jersey, who threw cold water on the idea that Volvo would be willing to allow Polestar sales through its facilities, but added that they expect to handle a fair amount of used Polestar sales through next year."Volvo is not going to let us sell the remaining 2026 inventory out of our showrooms. Once the remaining 2026 inventory is done and gone we can sell the remaining off-lease vehicles however we want," Haiken said. "Volvo can't tell us what we can and can't sell (used). Having customers come into our Volvo showrooms to sign paperwork isn't a breach of our licensing agreement."AdvertisementAdvertisementAfter we shared our findings with Polestar, a spokesperson told us that Polestar Los Angeles' move to the Volvo dealership was "planned for some time and is not related to last week's announcement." They added that Polestar "will have its own dedicated retail space and brand experience," and that the move is part of a "broader transition from a direct-to-consumer sales model to a retailer-based retail strategy."Meanwhile, when we checked in with Volvo, a spokesperson pretty much washed their hands of the whole mess."Volvo Cars and Polestar are two different companies and have separate retailer networks and servicing agreements. Polestar has stated that they 'will continue to support customers, including providing access to its service network.' For further comment, we kindly ask that you reach out to Polestar directly."Haiken's New Jersey Polestar dealership buildoutHaiken's New Jersey Polestar dealership started in an original Tesla space within the Short Hills mall. His dealer group is currently in the process of building a flagship Polestar dealership that isn't complete yet. "I don't know what I'm going to do with my building. I don't think any of us know what we are going to do with our buildings." Haiken said. The dealer principal is hoping someone reaches out and wants a flagship building. "I don't think any of the 32 dealers know what they are going to do with their buildings at this point."AdvertisementAdvertisementMax Muncey of LaFontaine Automotive Group, which owns Polestar Detroit, told The Drive, "We are currently evaluating our options both with Polestar and existing brands and of most importance is communicating with our existing customer base about their leases and future ownership."We called a number of other Polestar dealers around the country, and few had any answers about potentially folding in with Volvo or how their operations would look in the coming months. A salesperson at Polestar Tampa hung up the phone abruptly upon being asked what the plans were with the dealership going forward. At Polestar Austin, a salesperson named Michael told The Drive, "I'm not sure, nothing been discussed with us yet." And a salesperson named Junior at Polestar Miami said they "still have a lot of meetings and communication that needs to happen. Still waiting for the plan of action to come down. Right now we are running normal as usual, but clearly things are not normal in the long run."Haiken made note of the situation and how it's never happened in modern times. "This is really unfortunate, because the brand is still around. It's not a bankruptcy. You can go up to Canada and buy a 2027 Polestar 2. You can go to Sweden where Polestar lives in the same showrooms with Volvos, and I called them, and they are selling more Polestars than Volvos. Plus, we have a very healthy lease maturity coming back and we are going to have to market these cars. This is a very different scenario than Saab, or Fisker, or another brand that left the U.S. or went bankrupt." Know more about the mess at Polestar? Send us a line at tips@thedrive.com
