Volvo Cars has secured an exemption from the Trump administration, allowing the Swedish automaker to bypass a U.S. ban on Chinese-connected car technology. This agreement permits Volvo, majority owned by China’s Geely Holding, to continue selling its vehicles equipped with this technology in the United States.
Background on the Ban
In January 2025, under rules finalized by the Biden administration, vehicles equipped with software and hardware developed by Chinese companies were banned over national security concerns. This affected 2027 model-year vehicles, with a further ban on connected hardware beginning with 2030 model-year vehicles. Volvo, with its ties to Chinese company Geely and manufacturing operations in China, faced potential bans under these rules.
Volvo's U.S. Operations
Volvo imports most of its vehicles from Sweden to the U.S., except for the EX90 assembled in South Carolina. The automaker announced plans in September 2025 to expand production at its South Carolina factory, including the XC60 midsize SUV and a new hybrid vehicle. Additionally, Volvo plans to move all production of the Polestar 3, an EV from its sister company Polestar, to the U.S. Currently, Polestar 3 production also takes place in Chengdu, China.
Exemption Details
The exemption followed “constructive discussions” between Volvo and the U.S. Department of Commerce and other officials regarding the company's governance, technology, and data security. This exemption allows Volvo to proceed with its U.S. expansion plans without interruption.
Impact on Other Companies
The rule, titled “Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles,” spends considerable focus on the threat from vehicles with automated driving systems developed by companies linked to China. Under these rules, Chinese companies are prohibited from testing autonomous vehicles in the U.S. Currently, companies like Baidu’s Apollo Autonomous Driving LLC, Pony.ai, and WeRide hold permits to test their technology in California, but it remains unclear if these permits will be revoked. TechCrunch has reached out to the California Department of Motor Vehicles for clarification.
Source: https://techcrunch.com/2026/05/26/trump-administration-permits-volvo-to-keep-selling-connected-cars-in-the-us/
