AFS Client Sues Polestar, Drawing National Media Attention

What the Press Has Reported

The Wall Street Journal reported that Prestige Imports of East Hanover, New Jersey alleges that Polestar “orchestrated” its recent ban by the US government as “cover” for its desire to leave the US market. According to the Journal, the complaint contends that Polestar’s decision to exit the United States effectively and wrongfully terminates the dealer’s state franchise agreement, with the dealership claiming at least $25 million in damages. 

The Journal noted that Polestar announced in June that it would stop selling new vehicles beginning with the 2027 model year after the US Department of Commerce denied its waiver request under the new “Connected Vehicles” rule, and that the Commerce Department had approved a waiver roughly a month earlier for Volvo Cars, which shares common Chinese ownership and other links to Polestar. Polestar declined to comment on the litigation. 

Automotive News reported that the suit seeks a declaration that Polestar violated New Jersey’s Franchise Practices Act, payment of the franchise’s fair market value, and five years of continued parts and warranty support. As reported, the complaint alleges that Polestar planned its US exit for two years and “maneuvered the [government] into a ban,” and that a July “force majeure” letter amounted to a constructive termination without the required 60-day notice or good cause. 

The article also reported allegations that Polestar continued urging US dealers to invest — including endorsing a multiyear Bergen County expansion as recently as February 2026 — while preparing to leave the market. 

The Automotive News piece also quoted Sen. Bernie Moreno (R-OH), a former auto dealer, who has said Polestar was treated no differently from Volvo. 

“Polestar was screwed by Polestar. It wasn’t screwed by the US government,” Moreno told CBT News in July. He added that “Volvo was given a list of items that they needed to follow in order to comply. It was a very exhaustive and tough list that Volvo had to follow. Volvo chose to follow it.” 

Of Polestar’s reliance on the restrictions, the Senator said: “By blaming the Department of Commerce, they think they can bypass lawsuits from dealers and call it a force majeure clause. That’s obviously just a scam on dealers.”

The article further reported on remarks from Sweden’s foreign trade minister, Benjamin Dousa, on the contrast between the two automakers’ efforts in Washington. 

“I was personally very involved in the Volvo Cars issue and traveled with CEO Hakan Samuelsson to Washington and did what I could to ensure that the company would receive its license,” Dousa is quoted as saying. “But Polestar has not asked for help.”

Dealers facing market withdrawals, regulatory restrictions, or franchise termination issues can contact ArentFox Schiff to discuss how these developments may affect their operations.

Read the full articles below. (Subscriptions required)

The Wall Street Journal

Automotive News

New Jersey Law Journal