A dealer says Polestar's US "ban" was a choice, and wants $25 million for it

Prestige Imports, a New Jersey retailer with a Polestar store in Short Hills, has sued the automaker for at least $25 million, arguing that the brand's US withdrawal was not forced by Washington but arranged over two years and then blamed on a federal rule ^[1][2]. The interesting part for anyone who signs distribution agreements is the legal theory: that a manufacturer cannot use a regulatory denial it allegedly invited as a substitute for the notice and cause its franchise contracts require ^[3][4].

The mechanics matter. The Connected Vehicle Rule bars vehicle software controlled by Chinese or Russian companies beginning with the 2027 model year, and Polestar, like Volvo, is owned by Geely ^[9][7]. Volvo obtained a Commerce waiver permitting it to keep selling connected cars in the US, which it attributed to "constructive discussions with the US Department of Commerce and other US officials" over governance, technology and data security ^[8][10]. Polestar says it lacked that clearance and that Washington left it no choice but to leave ^[11]. Prestige's complaint says the clearance was declined rather than unavailable, and that when the denial arrived Polestar never challenged it ^[3].

Two outside voices support the dealer's framing. Senator Bernie Moreno, an Ohio Republican and former car dealer, said "Polestar was screwed by Polestar. It wasn't screwed by the U.S. government," and that Volvo worked through an exhaustive and tough list of requirements Polestar simply declined ^[13][14]. Sweden's foreign trade minister, Benjamin Dousa, said he flew to Washington with Volvo Cars chief executive Hakan Samuelsson to help secure that license, adding: "But Polestar has not asked for help" ^[15]. Moreno also put the brand's US economics at a loss of $30,000 to $35,000 per sale, which is the quieter explanation for an exit ^[14]. At those figures, the $25 million Prestige is claiming is roughly 700 to 830 cars' worth of losses ^[21].

The technical overlap is the dealer's best circumstantial evidence: the Polestar 3 is built in a plant shared with Volvo, and the two brands run near-identical infotainment ^[12]. So is the conduct alleged after the rule was finalized in early 2025 - a chief executive telling retailers the brand was tracking its best year yet and designing the Polestar 7 for American buyers, a car due in 2028, plus an executive signing off on a multiyear Bergen County expansion as recently as February 2026 ^[16][17]. Commerce denied authorization for 2027-model-year cars on June 25, and PSNY fell more than 13% that day ^[18]. Taken in sequence, roughly four months separate the expansion approval from the denial ^[22]. In early July, Polestar sent Prestige a force majeure letter calling the restriction beyond its control ^[20].

New Jersey's Franchise Practices Act generally requires 60 days' notice and good cause tied to the dealer's own failure to perform; Prestige says it got neither and wants damages, the fair market value of the franchise, and five years of parts and warranty support ^[4][5]. Polestar declined to comment, and has said owner and lease support continues and that about 80% of its sales are in Europe anyway ^[6][19].

Watch whether the force majeure letter survives contact with the statute, because that is the whole case: if a manufacturer can decline a permission, accept the denial without appeal, and call the result an act of government, franchise protections stop at the border of any regulated technology. Watch also for other state filings, since the New Jersey theory travels.