An electric carmaker partly owned by Volvo Cars announced it is being forced to pull out of the U.S. market, throwing a wrench in its plan to ramp up production in South Carolina. Polestar Automotive Holding said last week that the U.S. Commerce Department has banned it from selling vehicles in the United States under a crackdown on the use of web-connected cameras and other data-collection devices that Chinese or Russian adversaries could exploit. The company did not comment on the agency’s decision, which takes effect with the 2027 model year. Polestar stated that its next step will be to focus on the European market, which already accounts for about 80 percent of its sales. "The automotive industry is entering a new phase, based on regional dynamics," CEO Michael Lohscheller said in a June 25 written statement. The company will sell down its existing U.S. inventory of Polestar 3 and Polestar 4 sport-utility vehicles and “will continue to support customers, including providing access to its service network.” The EV maker, like Volvo, is headquartered in Sweden and owned by China-based Geely Holding. Unlike Polestar, the better-known sibling brand was issued a waiver to the rule last month, allowing it “to continue its growth plans in the U.S.,” according to a written statement. Polestar had warned as early as 2024 that the government’s so-called connected-vehicle policy would "effectively prohibit" it from selling even domestically built cars in the United States. The rule was adopted in early 2025, in waning days of the Biden administration. Citing national security concerns, the White House sought to ban “connected vehicle manufacturers owned by, controlled by or subject to the jurisdiction or direction of China or Russia, and vehicles using their covered software.” “Companies from these countries may be compelled to share data or allow remote