Polestar has run into a new regulatory hurdle in the United States, with rules targeting connected-vehicle technology tied to China effectively barring future sales of the brand’s cars in the country. Polestar, though headquartered in Sweden, has ownership and supply chain ties to Chinese automaker Geely, which has put it in the crosshairs of restrictions aimed at limiting Chinese software and hardware in vehicles sold to American consumers.

The rules form part of a broader U.S. push to restrict connected-car components, including software, that originate from China, over national security concerns tied to data collection and remote vehicle control. Polestar joins a small number of automakers directly affected by the policy.

The move adds to a difficult stretch for Polestar in North America, where it has already been working through production shifts and cost pressures. It also highlights how geopolitics is increasingly shaping which EV brands can compete in the U.S. market, independent of vehicle quality or consumer demand.

California is rolling out a new incentive aimed at getting first-time buyers into electric vehicles. Governor Gavin Newsom has signed a bill creating the “MyFirstEV” program, which will hand qualifying first-time EV buyers an instant $3,500 rebate directly at the dealership starting later this summer.

The program arrives at a pivotal moment for the EV market. With the federal EV tax credit no longer available, states have increasingly stepped in to fill the gap and keep adoption momentum going. California, long the largest EV market in the country, is betting that an upfront, point-of-sale discount will do more to move buyers than a tax credit claimed months later at filing time.

Details on income limits, vehicle price caps and which models qualify are expected to be finalized before the program opens to shoppers. The move is likely to be watched closely by other states weighing their own replacement incentives following the repeal of the national credit.