Volvo Cars, which is majority owned by Geely Holding of China, announced on Tuesday that it has obtained an explicit authorization from the U.S. government to continue selling vehicles in the United States that use Chinese "connected technology." The company said the Commerce Department granted the authorization after what it described as constructive discussions with U.S. agencies about Volvo's governance, technology and data security practices.
The approval comes amid a regulatory backdrop in which the Biden administration finalized rules in January 2025 that effectively bar almost all Chinese cars and trucks from the U.S. market as part of a broader effort to restrict vehicle software and hardware originating in China. Those rules include a prohibition on most Chinese-developed and -maintained software, a provision that took effect in March 2026 for the 2027 model year. Lawmakers have also proposed measures to tighten the rules further.
Volvo said the specific authorization permits it to continue its planned expansion in the United States. The company did not provide additional details about the scope of the authorization in its announcement. The Commerce Department did not immediately respond to a request for comment.
On the manufacturing front, Volvo has signaled a ramp-up of U.S.-based production in recent months. In September the company said it would begin producing a new hybrid model in the United States by the end of the decade; that model is intended for the U.S. market and is expected to help improve capacity utilization at Volvo's South Carolina plant. In April 2025 Volvo Cars' chief executive announced plans to increase U.S. vehicle output, and in July the group said it would start producing the XC60 mid-size SUV in South Carolina beginning in late 2026.
Volvo's product strategy has also evolved. Once positioned to phase out non-electric models by 2030, the company reversed course last year and stated that hybrids will remain part of its lineup. At present, Volvo imports all of its U.S.-market cars from Europe with one exception: the EX90 electric SUV, which is assembled in South Carolina. Volvo previously imported vehicles from China as well, but those imports were halted after tariffs on Chinese-made cars were implemented.
The authorization from the Commerce Department follows public policy measures targeting software and hardware from China and reflects a case-by-case outcome in which an individual automaker received clearance after demonstrating governance and data-security arrangements that addressed regulators' concerns. Volvo characterized the decision as a step that allows it to pursue its U.S. growth plans while those broader restrictions on Chinese-origin automotive technology remain in force.
Summary: Volvo Cars received a Commerce Department authorization to keep selling vehicles in the U.S. that include Chinese connected technology after agency discussions on governance, technology and data security. The permission sustains Volvo's U.S. growth plans against a regulatory environment that largely restricts Chinese-developed vehicle software and hardware.