As geopolitics supercharges global EV demand, Washington is gating who gets to sell into it
Swedish electric car maker Polestar (PSNY) says it will stop selling cars in the United States after the Commerce Department blocked its sales in the country.
The company, which is owned by Chinese carmaker Geely, said US officials chose not to “grant Polestar authorization under the current US Connected Vehicle Rule.” That decision means Polestar cannot advertise or sell its new model-year 2027 cars in the US.
The rule behind concerns about data security, called The Connected Vehicle Rule, limits some foreign technology. It does it in two ways. One is a ban on software under Chinese or Russian companies’ control starting from the 2027 model year. Second is the ban on hardware, also from both countries, starting in 2030.
After the news, Polestar shares fell more than 13% by midday.
Volvo cleared while Polestar is shut out
The ban is awkward for the company because it builds one of its models, the Polestar 3, at a factory it shares with Volvo, which is also part of Geely’s group of brands. Volvo, though, was given a waiver and can keep selling its cars even with the rule in place.
Explaining that waiver back in May, Volvo said: “The process is carried out on a case-by-case basis and the issuance of a specific authorization follows constructive discussions with the US Department of Commerce and other US officials regarding Volvo Cars’ governance, technology and data security.”
Since Polestar could not get the same clearance, it plans to gradually shut down its US sales and marketing work and put its attention on the European market instead. The company added that “existing Polestar owners and lease customers will continue to receive the same level of support and access to service as they do today,” and that all “existing warranties remain in effect and will continue to be honored in accordance with their terms and conditions.”
Oil price scare pushes EV sales to record levels
The pullback lands at a time when electric vehicles are selling at record rates around the world, helped along by the oil price scare.
The brief shutdown of the Strait of Hormuz pushed up crude prices for a while, and even though the route has now reopened and oil has slipped back to where it sat before the conflict, the jolt may keep pushing buyers toward EVs for years to come.
Figures from Goldman Sachs show the EV share of global car sales has climbed by 3.4 percentage points since the US and Israel decided to strike Iran. Leaving out a one-off jump in September 2025, when US electric car sales rushed ahead of a tax credit running out, the current level of 26.1% is the highest on record.
China has seen the biggest rise in EV sales, but Goldman notes that 12 of the 15 largest EV markets have seen their share grow since February. The one clear exception is South Korea, where sales dropped only because they had spiked earlier in the year after a federal tax break.
Working on the idea that every one million shift toward EVs cuts road oil use by 30,000 barrels a day in the US and 20,000 barrels a day elsewhere, Goldman’s analysts reckon global oil demand has already fallen by roughly 130,000 barrels a day. That is about 0.1% of all the oil the world burns, but it adds up.
That estimate assumes the jump was a short-term reaction to the Iran conflict and that EV shares hold at May’s levels. If the trend sticks around, as Goldman says demand could drop by 320,000 barrels a day by December 2027, or about 0.3% of global use.
The bank looks like it favors the longer-lasting outcome for now, and its analysts say they kept their numbers on the low side. They note that some people are already swapping the cars they own for EVs because fuel costs so much.
The proof is a fall of more than 20% in China’s gasoline sales from a year earlier, along with a rise in EV charging. They also left out two- and three-wheeler EVs, which make up most EV sales in India at 92% in 2025, Vietnam at 80%, and China at 35%.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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