Dealer Claims Polestar Designed The US Sales Prohibition In A $25 Million Lawsuit

A New Jersey Polestar dealer is suing the brand for $25 million, alleging it manipulated the federal Connected Vehicle Rule to manufacture a U.S. sales ban and exit the market while avoiding franchise obligations. The lawsuit claims Polestar chose not to seek regulatory authorization—unlike its sister company Volvo—to escape unprofitable American operations.

Prestige Imports of East Hanover is suing Polestar for $25 million, alleging the automaker encouraged dealer expansion for two years—including a major project for the 2028 Polestar 7—while secretly planning to exit the U.S. market.

Prestige Imports alleges Polestar orchestrated a federal ban under the Connected Vehicle Rule to evade franchise obligations and exit the U.S. market. The lawsuit claims Polestar, unlike its affiliate Volvo, intentionally declined to seek Commerce Department authorization or challenge the ruling to avoid further losses.

The lawsuit alleges Polestar violated New Jersey franchise law by using the federal ban as a pretext for constructive termination. Plaintiffs seek fair market value compensation plus continued parts and warranty support, citing Ohio Senator Bernie Moreno’s claim that Polestar’s $30,000–$35,000 per-vehicle loss motivated the brand to use the ban as an exit strategy.

Polestar has confirmed U.S. sales will end after the 2026 model year following a regulatory ban. Dealers may sell remaining inventory, and the company has pledged continued service and warranty support. For more on the regulatory decision or how this affects owners, check our previous coverage on why Polestar declined to challenge the ruling and our guide on the implications for current and future owners.