Volvo Cars has secured a special authorization from the US Department of Commerce to continue importing and selling connected vehicles in the United States, clearing a regulatory threat to one of its most important markets at a time when its Americas sales are falling.
The automaker, owned by China’s Geely Holding Group, said on Tuesday it had been granted a specific authorization under the Commerce Department’s “Connected Vehicles” rule, which restricts the sale of connected cars by manufacturers owned or controlled by China or Russia.
“With this specific authorization, Volvo Cars can continue its growth plans in the US,” the company said.
The Impact of the Rule
The rule, which took effect in March 2025, targets the connectivity hardware and software that let vehicles link to external networks, along with automated-driving software, on national-security grounds and applies to passenger vehicles under 10,001 pounds, covering nearly all new cars.
Its restrictions phase in over several years.
Bans on covered software and a prohibition on manufacturers owned or controlled by China or Russia take effect with model-year 2027 vehicles, while a full ban on covered connectivity hardware follows with model-year 2030.
That manufacturer-level test is what put Volvo at risk.
As the brand has been majority-owned by China’s Geely since 2010, it counted as a manufacturer subject to Chinese control, which would have barred it from selling connected vehicles in the US from model-year 2027 — effectively its entire new lineup — regardless of where its parts came from.
That made Volvo more exposed than US automakers such as General Motors and Ford, which mainly had to stop importing Chinese-built models, or Tesla, which already separates its supply chains.
Volvo‘s problem was its ownership, not its components.
Volvo Car USA was required to go through a case-by-case Commerce Department process to obtain the authorization, which the company said followed “constructive discussions” with US officials over its governance, technology and data security.
A Large US Footprint at Stake
The clearance protects a substantial American operation.
Volvo has invested more than $1.3 billion in its plant in Charleston, South Carolina, since 2018, creating over 2,000 jobs, and in September 2025 announced further investment to bring two additional vehicles into production there before 2030.
Its US headquarters is in New Jersey, and Volvo Car USA operates 281 dealers across 48 states employing about 11,500 people. The company marked 70 years in the US last year.
The US has historically been one of Volvo‘s largest markets, accounting in stronger years for an estimated 100,000 to 130,000 vehicles annually, or roughly 15% to 18% of global sales.
The company’s reported Americas sales, a broader region that includes Canada, have fallen sharply over the past year.
Falling Americas Sales
Volvo sold 29,651 vehicles in the Americas in the first quarter of 2026, down 28% from 41,007 a year earlier, according to the company’s sales reporting.
Electrified models in the region fell 30% to 10,896, with fully electric sales down 21% to 4,964 and plug-in hybrids down 36% to 5,932. Mild hybrids and combustion models dropped 26% to 18,755.
The decline outpaced Volvo‘s global trend. Total sales across all regions fell 11% to 153,316 in the quarter, with fully electric sales the lone bright spot, up 12% to 36,348.
New US Model
Volvo has recently joined the growing list of automakers launching a fully electric, midsize SUV in the United States.
The brand opened orders for the EX60 earlier this month, with a starting price of $58,400 — just $410 above the Rivian R2 Performance, for which the online configurator opened last week.
Volvo said it expects initial deliveries to begin later this summer. Rivian R2’s first customer deliveries are scheduled to start in June.
