- A New Jersey Polestar retailer is seeking at least $25 million in damages.
- The lawsuit alleges Polestar planned its U.S. exit well before the ban.
- Polestar says it will still support existing owners and remaining inventory.
Polestar’s American future looked settled in June. That’s when the Commerce Department denied the EV maker authorization to sell 2027-model-year vehicles and beyond. Now, one of its New Jersey retailers says that explanation leaves out the most important part. Prestige Imports has sued Polestar for at least $25 million. It alleges the company used the regulatory decision to mask a retreat it had been planning for years. The case could decide whether Polestar was genuinely forced out or found a really useful door marked “exit.”
Read: Polestar Owners Fear A Fisker-Style Resale Collapse After US Ban
On June 25, we found out that Polestar failed to get authorization to sell its cars under the Connected Vehicle Rule. That lack of authorization effectively spelled the end of Polestar sales in America. The brand said it would sell off inventory and maintain service but new cars wouldn’t come. At the time, Polestar pointed out that 80 percent of its sales volume was in Europe anyway, so it would just refocus.
What The Dealer Alleges
According to a report from Autonews, Prestige Imports, a dealer with several locations, says none of this was an unavoidable surprise. It alleges that Polestar spent two years planning its U.S. departure and “maneuvered the [government] into a ban” to smooth the way out. Then it declined the same authorization Volvo secured. Finally, the complaint says, it chose not to appeal once the denial came through. Those are the pillars of the suit, though things get more tangled from there.
The lawsuit also claims Polestar kept urging its U.S. dealers to spend even as it prepared to pull out. After the Connected Vehicles Rule was finalized in early 2025, the CEO reportedly told retailers the brand was heading into its best year yet and shaping the Polestar 7 around American buyers. As late as February 2026, a Polestar executive allegedly signed off on a multiyear Bergen County expansion tied to the Polestar 7’s planned 2028 launch.
Senator Points The Finger Too
Prestige’s case also cites comments from Sen. Bernie Moreno, a former auto dealer who argues Polestar had another option available. “Polestar was screwed by Polestar. It wasn’t screwed by the U.S. government,” Moreno told CBT News in July. He said Volvo met an “exhaustive and tough” list of government requirements, while Polestar simply chose not to follow the same path. Moreno also claimed Polestar was bleeding $30,000 to $35,000 on every vehicle it sold in the States.
Polestar reportedly sent Prestige a force majeure letter in early July, arguing that the government restriction was outside its control. Prestige calls for a constructive termination of its franchise, arguing the automaker failed to provide 60 days’ notice or establish “good cause.” Under New Jersey law, a manufacturer generally needs both. Good cause is tied to a dealer’s substantial failure to meet franchise obligations. New Jersey’s franchise statute is not especially friendly to automakers looking for a quick clean break.
Polestar declined to comment on the case itself. Prestige wants damages, the franchise’s fair market value, and five years of parts and warranty support. If the two sides can’t come to a settlement, a court will decide who is right and who loses out.
