The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, June 30 (Reuters Breakingviews) - China’s Geely effectively controls both automakers. Yet smart-car rules allow $6 bln Volvo to keep selling vehicles in the US, but not the $2.5 bln EV maker. It’s not clear why. But satisfying regulators would be expensive. Polestar may be better off being excluded.

Full view will be published shortly.

Follow Katrina Hamlin on Bluesky and LinkedIn.

CONTEXT NEWS

The U.S. Commerce Department did not grant carmaker Polestar special authorization to sell cars under the Connected Vehicles Rule, which restricts the import and sale of cars with connected-vehicle technology linked to China beginning with the 2027 model year, according to an announcement from the company on June 26. Polestar’s New York-listed shares fell 5.9% to $18.97 on June 26 following the news.

Volvo Cars said on May 26 it received approval from the U.S. ​government allowing it to continue selling vehicles.

Geely founder Li Shufu holds 23% of Polestar, Volvo holds 20%, and Geely Sweden holds 12% following a series of recent debt-to-equity conversions and equity placements.