When the Law Kills Your Electric Car Dealership

Owning a US electric vehicle dealership has been a wild ride in the 2020s.

Since Polestar Short Hills opened in northern New Jersey in 2021, it went through a Covid-era demand spike and EV shortage that left some used electrics with higher valuations than new ones; a new federal tax credit of up to $7,500 that brought a new wave of drivers in the door; lower sales volumes after the rollback of that federal tax credit, and the snipping of a state one; and then another wave of buying when EV-curious drivers began running from Elon Musk’s Tesla because of the CEO’s involvement with 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 and more serious challenge. Polestar said in late June that the US Commerce Department had denied an authorization that would have allowed the brand to continue selling cars in the US despite a federal rule restricting the sale of vehicles with Chinese-made connected-vehicle technology. The company, which is majority-owned by China’s Geely Holding and its founder Li Shufu, says it will stop selling Polestar vehicles in the US beginning with the 2027 model year.

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

Volvo, which is also majority-owned by Geely, received authorization from the Commerce Department in March, allowing it to continue selling its vehicles in the US, despite its Chinese connections. Volvo said at the time that it held “constructive discussions” with the department about the automaker’s “governance, technology and data security.” (When asked about the discrepancy, a Polestar spokesperson said that the company “cannot comment on how legislation applies to other manufacturers.”)

“I am very frustrated in 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 that internet-connected automotive cameras, microphones, and GPS equipment threatened US safety. “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 US citizens,” Commerce secretary Gina Raimondo said at the time.

The US Commerce Department did not respond to WIRED’s questions.

Polestar said in a statement last week that US dealerships would sell “existing stock” of the Polestar 3 and Polestar 4, and that a US service network would “continue to support customers.” It framed the move as “increasing its strategic focus on Europe,” and said that 94 percent of Polestar’s first quarter 2026 sales took place outside of 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 US until December 2025.

Some Polestar dealerships handle service issues through Volvo centers, but Haiken said his stand-alone Polestar service center will continue fixing and servicing the EVs. “We have the volume to justify it,” he says. “We have to be around to perform that work.” Not all dealerships might make the same decision, he said, though vehicles will likely be sent to the closest service center for tune-ups and fixes.