Built Here, Banned Here

Outside Charleston, South Carolina, on a line run by Volvo, American workers build a car that most Americans will soon be unable to buy new. The Polestar 3 comes off that line in Ridgeville. From model year 2027 it can't be sold in the United States.

Nothing about the car is the problem. Its owner is. Polestar is controlled by Geely, a Chinese company, and under a rule the Commerce Department wrote in 2025, that is enough to keep it off the market, wherever it's built. This week the Senate is trying to make that rule permanent.

What happened to Polestar

In January 2025 the Commerce Department's Bureau of Industry and Security finalized a rule aimed at connected cars with ties to China or Russia. Companies it catches can apply for a "specific authorization" to keep selling. Volvo Cars, majority-owned by Geely, got one on May 26, after what Volvo called "constructive discussions" about its governance, technology and data security. A month later, on June 25, Polestar said the bureau had declined to give it one for model year 2027 and beyond.

The bureau doesn't publish its reasons, so the public record doesn't explain why one Geely company passed and the other didn't. Polestar says it will keep selling the Polestar 3s and 4s already in the country and keep servicing the ones on the road. It also says 94% of its retail sales in the first quarter were outside the United States. Polestar doesn't report American sales, but independent estimates for 2025 put them between about 5,400 and 5,700 cars.

What that means if you want one of the last ones is in Dying Star. This is about the wall itself.

How the rule works

The rule targets 2 kinds of systems. The first is anything that lets a car talk to the outside world by radio above 450 MHz: Bluetooth, cellular, Wi-Fi, satellite. The second is automated driving at SAE Level 3 and above, the point where the car drives itself in some conditions. Software for either with a "sufficient nexus" to China or Russia is banned from model year 2027. Connectivity hardware follows in model year 2030.

Then comes the part that caught Polestar. Companies with that nexus can't sell new connected vehicles in the United States from model year 2027, even if the vehicle was built here. Since virtually every new car has Bluetooth, a ban on a company's connected cars works as a ban on the company. Ownership counts as nexus: a company qualifies if it's based in China, or if a Chinese owner holds a majority or a "dominant minority" of it. The rule sets no fixed percentage.

A wall in 2 layers

The rule sits on top of the tariffs, and the 2 do different jobs. Since September 2024, Chinese-built electric cars have paid a 100% tariff, with other duties stacked on top; Reuters puts the total above 100%. That makes a Chinese-built car expensive. It doesn't stop a Chinese company from building a car in Tennessee and selling it in Ohio. The rule does.

A tariff makes a Chinese-built car expensive. The rule makes a Chinese-owned car illegal to sell, wherever it's built.

What the Senate wants to lock in

The Connected Vehicle Security Act, introduced in April by Senators Bernie Moreno and Elissa Slotkin, would turn the rule into law and widen it. As it passed the Senate Commerce Committee in July, it adds Iran and North Korea to China and Russia, covers every kind of road vehicle including trucks and trailers, and swaps the "dominant minority" test for a fixed line: more than 15% of a manufacturer's equity, votes or board seats tracing back to one of those countries. Committee chairman Ted Cruz pointed out that a 15% line could reach Mercedes-Benz, about a fifth of which is held by Chinese investors.

On September 24 the sponsors brought it to the floor with 51 supporters, by Reuters' count, planning to pass it by unanimous consent, a fast track that fails if a single senator objects. They held off, expecting an objection from Senator Rand Paul, and plan to try again this week, before the Senate leaves to campaign.

The difference between a rule and a law is the whole fight. A rule written by one Commerce Department can be rewritten, waived or granted exceptions by the next one, or by the same one. A law changes only when Congress changes it. Both directions are in play. On September 3 the Alliance for Automotive Innovation, which speaks for most of the automakers selling cars here, asked Congress for a permanent ban. On September 11 the President said he'd be "okay" with Chinese companies building cars in American plants, as long as they hire American workers.

Next door: Mexico

Mexico shows what happens when the wall is only a tariff. Chinese brands took about 15% of Mexico's new-car market in 2025, and BYD alone sold about 85,000 cars there. On January 1 Mexico raised its tariff on Chinese-built cars from 20% to 50%. Imports fell by nearly half in January, and Chinese brands still took about 1 in 6 of the cars sold in the first 7 months of the year.

The next step is building there. On Monday, Nissan Americas chairman Christian Meunier said Chinese brands will be building cars in Mexico "probably in the next two to three years," and called their growth "a big, fast invasion." He also put them at least 5 years from American showrooms. A Mexican factory wouldn't shorten that on its own, because the connected-car rule follows the company, not the plant.

To the north: Canada

Canada went the other way. In January it cut its tariff on Chinese-built EVs from 100% to 6.1% for up to 49,000 cars a year, and it expects more than half of that quota to be cars with an import price under C$35,000 ($24,710) within 5 years. The first arrivals, in late May, showed how tangled "Chinese car" has become: Teslas built in Shanghai, and the Lotus Eletre.

Across the Atlantic: Europe

Europe is the closest thing to a preview. Chinese-owned groups took 10.8% of the EU's new-car market in August, up from 6.6% a year earlier, by Carveyance's tally of ACEA figures. That is about 1 new car in 9.

2 details in that number matter to an American reader. The first is that it counts Volvo, which Geely owns: the same Volvo Washington just cleared to keep selling here. The second is how the Chinese brands got around Europe's own wall. Since October 2024, Chinese-built electric cars have paid the EU's standard 10% plus extra duties of 7.8% to 35.3%, depending on the maker; the low end is Tesla's Shanghai plant. Hybrids pay only the 10%, so Chinese brands started shipping more of them. In September the EU asked Beijing to cap its hybrid exports.

What the wall costs

The usual argument about Chinese cars is price, so here are real ones. BYD's smallest car, the Dolphin Surf, lists from €23,490 ($26,730) in Germany, though promotions have cut that sharply at times. The same car is sold in Mexico as the Dolphin Mini, listed at MXN 399,800 ($22,580). The cheapest new EV in America is the 2027 Chevrolet Bolt, at $28,995 including destination.

At the cheap end the gap is smaller than the headlines suggest, and the Bolt is a bigger car than the BYD. The wall's other effect is simpler: no Chinese brand sells new cars here, in a market where the average new car sold for $50,089 in August.

If you're shopping

Polestar: the 3s and 4s already here can still be bought, and Polestar says it will keep servicing them. What happens to their resale value is the open question.

Volvo: cleared to keep selling. As of May, Volvo said every model it sells here came from Europe except the EX90, which it builds in South Carolina, with XC60 production there due to start late this year.

American brands built in China: the Buick Envision and the Lincoln Nautilus are both built in China for this market, and both need Commerce's approval to keep coming. Ford has applied for the Nautilus. GM is moving Envision production to Kansas in 2028.

Chinese brands: not in an American showroom for at least 5 years, by Meunier's count, and not at all, short of a waiver, if the Senate bill becomes law.

For most of the car's history, where it was built decided what you paid for it. From next model year, who owns the company that built it decides whether you can buy it at all.