- Polestar faces a sales ban in the U.S. starting in 2027. This decision disrupts its network of 32 dealerships, leaving both dealers and owners in a state of confusion regarding future operations and service support.
- Dealers taken by surprise. Numerous dealers were unexpectedly impacted by the ban, while others had predicted it but felt their input was disregarded.
- Volvo may play a role in the transition. Despite some issues, Volvo’s network could help with servicing, although hurdles exist in selling leftover Polestar inventory through Volvo dealers.
- Franchises in uncertainty. Dealerships are unsure about the future of their investments and facilities, with no solid plan ahead.
Key takeaway: Polestar’s unforeseen U.S. sales ban causes turmoil for dealers and owners, leaving uncertain plans for ongoing operations and inventory handling.
AI assisted, editor reviewed
The decision by the U.S. government to prohibit Polestar from selling vehicles in the country under a rule against Chinese technology has plunged the automaker’s fledgling 32-dealer network into disarray. Dealers, owners, and Polestar’s corporate teams are now grappling with how to manage vehicle servicing, sell the remaining 2026 inventory, and deal with real estate logistics as the company is abruptly compelled to cease operations, according to multiple dealer sources who spoke with The Drive.
This situation is unprecedented. While brands may emerge and disappear over time, even when automakers close for financial reasons, there are usually signs. Dealers indicate they received no warning that a decision was about to be made when Geely-owned Polestar informed them last Thursday that the government had rescinded its operational certification in the U.S.
One dealer is in the midst of building a flagship retail location that may never be utilized. Others were aware of potential issues and say their recommendations for improving the brand were overlooked. Frustrations are mounting, and anger is becoming clear.
A dealer who requested anonymity due to concerns about repercussions from Polestar told The Drive that approximately 2,800 new Polestars are still inbound to the U.S. market. Most, if not all, of those vehicles are likely Polestar 4s, as the 2026 Polestar 3 was not sold in the U.S. because the automaker intended to move to the 2027 model.
“What’s the plan for the car?” the source asked regarding lease incentives. “We’ll be marketing these 2026s in the middle of 2027. I have no idea what the consumer interest will be in these; it’ll just have to be the lowest lease and we’ll take the risk. I can’t imagine who else will sign on for it. There’s no demand for the cars when there’s no brand to support it. It seems like too many cars are here for us to ride this out.”
“We don’t have a clear direction. We can’t act quickly enough!” the source continued. “What should we do with hundreds of thousands of dollars in fixtures?”
Compounding the frustrations is the fact that Volvo, which Polestar separated from in 2017 and is also owned by Geely, received the green light to keep selling cars in the U.S. earlier this spring despite its Chinese connections. Thus, Volvo’s dealer network is a logical fallback to handle Polestar servicing or assist in selling leftover stock, but even this presents challenges. Polestar has been restricted from selling cars at Volvo locations since its inception as an independent entity. Polestar and Volvo dealers may occupy the same site, and Volvo dealers can service Polestar’s vehicles, yet the showrooms must remain in separate buildings.
To illustrate the complications arising from this, a Polestar enthusiast and owner contacted The Drive and shared an email sent by Polestar Los Angeles General Manager Reza Fatemi, just 24 hours after the ban was announced. The email indicated that the dealership, owned by Galpin Motors, would be relocating to Galpin’s Volvo site “to serve you even better.” A similar announcement was highlighted on their website as of Wednesday.
Galpin Volvo just underwent a significant renovation last year and lacks sufficient space to build a new structure for Polestar on its premises, leaving its operational feasibility in question. We contacted Fatemi for a response, but he did not return our call, although on Tuesday a salesperson confirmed the relocation is proceeding.
On Tuesday evening, the Polestar enthusiast and owner received an email from Polestar Los Angeles with an “urgent update” stating that effective today, July 1, 2026, Polestar Los Angeles “will be consolidating our sales operations into our Galpin Volvo campus in North Hills.” The email also indicated that the Beverly Hills showroom will shut down, and all sales, inventory, and staff will move to North Hills.
Given the highly sensitive nature of these developments, the reaction from our anonymous source was far from positive.
“A year ago, we approached Polestar and suggested it wasn’t working and we should merge with Volvo. Polestar was on board, but Volvo wasn’t in agreement. I can’t believe Volvo is now allowing this,” they remarked. “We are operating in a status quo that isn’t really a status quo, unfortunately. I would have preferred to do this a year ago; we knew the brand wouldn’t succeed. It should have never departed from Volvo,” the dealer remarked.
The Drive also spoke with Matthew Haiken, president and CEO of Prestige Auto Collection Group, which operates a Volvo dealership, a Lincoln dealership, and a Polestar dealership in New Jersey. He expressed skepticism about Volvo allowing Polestar sales through its facilities but noted that they expect to handle a significant amount of used Polestar sales next year.
“Volvo will not permit us to sell the remaining 2026 inventory from our showrooms. Once the remaining 2026 stock is sold, we can manage the sales of the off-lease vehicles however we wish,” Haiken stated. “Volvo cannot dictate what we can sell (used). Inviting customers to our Volvo showrooms to complete paperwork doesn’t breach our licensing agreement.”
After we shared our findings with Polestar, a spokesperson clarified that Polestar Los Angeles’ transition to the Volvo dealership was “planned for quite some time and is not connected to last week’s announcement.” They added that Polestar “will maintain its own dedicated retail space and brand experience,” and that this move is part of a “comprehensive shift from a direct-to-consumer sales approach to a retailer-based retail strategy.”
Meanwhile, when we reached out to Volvo, a spokesperson distanced the company from the ongoing situation.
“Volvo Cars and Polestar are distinct entities with separate retailer networks and servicing agreements. Polestar has indicated that they ‘will continue to assist customers, including providing access to its service network.’ For further inquiries, please contact Polestar directly.”
Haiken’s New Jersey Polestar dealership was originally located in a former Tesla space within the Short Hills mall. His dealer group is currently attempting to complete a prominent Polestar dealership that remains unfinished. “I don’t know what I’m going to do with my building. I doubt any of us know what to do with our buildings at this point,” Haiken explained. The dealer principal hopes someone will reach out and express interest in a flagship facility. “I think none of the 32 dealers are clear about what to do with their buildings right now.”
Max Muncey of LaFontaine Automotive Group, which owns Polestar Detroit, informed The Drive, “We are currently assessing our options with Polestar and other brands, and the priority is communicating with our existing customers about their leases and future ownership.”
We contacted several other Polestar dealers across the nation, and few had clear answers regarding merging with Volvo or the future operations. A salesperson at Polestar Tampa interrupted the call abruptly when asked about the dealership’s forthcoming plans. At Polestar Austin, a salesperson named Michael told The Drive, “I’m not sure; nothing has been discussed with us yet.” A salesperson named Junior at Polestar Miami mentioned they “still have numerous meetings and discussions that need to take place. We’re waiting for a plan of action to be communicated. Currently, operations remain as usual, but clearly things are not normal long-term.”
Haiken acknowledged the situation noting its unprecedented nature. “This is genuinely unfortunate because the brand still exists. It’s not a bankruptcy. You can travel to Canada and purchase a 2027 Polestar 2. You can visit Sweden where Polestar exists in the same showrooms with Volvos; I reached out to them, and they’re selling more Polestars than Volvos. Plus, we have a sizeable lease maturity about to return, meaning we must market these cars. This is a very different situation compared to Saab, Fisker, or other brands that exited the U.S. or went bankrupt.”
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