New Jersey Polestar Dealer Sues for $25M, Alleging Automaker Planned U.S. Exit

Prestige Imports, a New Jersey-based Polestar dealer, has filed a lawsuit against Polestar Automotive, seeking at least $25 million in damages. The dealer alleges that Polestar had planned its exit from the U.S. market as early as two years before the U.S. government imposed its ban and actively manipulated the government to facilitate the prohibition. In June 2024, the U.S. Department of Commerce denied Polestar’s application for authorization under the Connected Vehicle Rule, effectively barring the company from selling new vehicles in the U.S. starting with the 2027 model year. Volvo, also owned by Geely Holding Group, received the same authorization in May 2024, while Polestar is accused of deliberately abandoning its own application. Data shows that Polestar loses between $30,000 and $35,000 on every vehicle sold in the U.S., reporting a net loss of $383 million in the first quarter of 2024. The lawsuit centers on procedural issues. In early July 2024, Polestar sent Prestige a force majeure notice, claiming the government ban was beyond its control. Prestige, however, is seeking a presumed termination of its franchise agreement, arguing that Polestar neither provided the required 60-day advance notice nor demonstrated valid cause for termination. Under New Jersey franchise law, both conditions are mandatory. Prestige is also demanding compensation equal to the fair market value of its franchise rights, along with five years of parts and warranty support. Polestar declined to comment on the lawsuit.