Two Car Companies Make The Same Car. Only One Was Banned From The U.S. And Nobody Knows Why

I have my own pet theory for why Volvo was approved as an automaker in the United States and Polestar, which is owned by the same company and makes some nearly identical cars, was banned. The whole situation is strange and a newly revealed letter makes it all the more curious.

The Morning Dump today shall venture into the unknown. Why was Polestar banned? Why is Porsche selling its IT consultancy to Tata’s tech consultancy and then buying back AI services? Why is Ford swapping from Google to Apple for its new vehicles?

Volkswagen Group is nothing but a series of question marks masquerading as a company, and one wonders how CEO Oliver Blume is going to get everyone to agree on an answer.

Polestar Seems To Think It Was Going To Be Approved

While there are some differences between Polestar and Volvo, they’re both Swedish brands that eventually were gobbled up by the Chinese holding company colloquially referred to as Geely. As with most car companies under the same umbrella, there’s a lot of platform and parts sharing going on between them (also, Volvo Cars has owned large parts of Polestar, variously, throughout the years).

In terms of corporate structure, you can think of Volvo and Polestar less like GMC and Buick under GM, and more like Audi and Porsche under Volkswagen Group.

This June, the American government decided to use a rule put in place under the Biden Administration focused on Chinese connected cars to ban Polestar from selling vehicles in the United States, including SUVs it builds in the United States. This was strange. The Volvo EX90 and Polestar 3 are essentially the same, share a similar software stack, and have a shared corporate parent, and yet one is banned and the other is not. Dealers have been freaking out, largely because they’ve invested in the brand and are now seeing that investment wasted.

The big question is: Why is alright to sell Volvos built in South Carolina and not Polestars also built in South Carolina? I have been espousing a conspiracy theory, which is that Polestar was sacrificed so that Volvo could stick around, although that assumes both were going to be banned.

What if neither were going to be banned? The Wall Street Journal has an exclusive, and it contends that the company was “blindsided” by the ruling and that it had assumed it was going to be approved based on communications with the Treasury Department:

The Aug. 18 letter provides Polestar’s first detailed account of its efforts to secure a waiver under a new Connected Vehicles rule aimed at preventing technology in U.S. cars, such as connected and GPS data, from being exploited by foreign adversaries such as China and Russia.

After Polestar answered multiple rounds of questions in 2025, Commerce officials said they were preparing to recommend Polestar’s approval, Polestar’s Wexler said in the letter. In April, Commerce’s Under Secretary for Industry and Security Jeffrey Kessler told Polestar management it would be reasonable to expect that, if Volvo were approved, Polestar would be too, he said.

Polestar offered multiple times to discuss “mitigation measures,” including restrictions as to where data is stored and who can access it, auditing and reporting requirements and independent cybersecurity assessments, Wexler said.

This information doesn’t answer much, other than confirming that Polestar assumed it was going to be approved alongside Volvo, and that the Treasury Department intimated that it believed so as well. What happened between April and June? That’s the question.

Porsche Sells Its IT Business To Tata, Then Contracts With Tata For AI Services

I’m giving the new Porsche CEO, Michael Leiters, the same courtesy that I give most new CEOs, which is time to make changes. A car company moves slowly, and even if you swap everyone in the C-Suite, it could take years before there’s a significant change in products. That’s the nature of the business.

In the late ’90s and early ’00s, the various companies under the Volkswagen Group went on a bit of a spending spree. That partially explains how management and IT firm MHP ended up being a Porsche-owned company.

Does it make sense for Porsche to own an IT company? Maybe not, and Porsche this week announced it was selling the company to Tata Consultancy Services (TCS), a tech company owned by Tata (also an automaker).

“Porsche is taking another important step in its strategy to focus resolutely on its core business with the transfer of MHP to Tata Consultancy Services,” says Dr Michael Leiters, Chairman of the Executive Board of Porsche AG. “At the same time, we are gaining a strategic partner in TCS. By combining Porsche’s automotive expertise with TCS’s digital technology and AI capabilities, we will further strengthen our innovative power, increase efficiency and boost our competitiveness in an increasingly data- and software-driven world of mobility.”

Generally, I’m supportive of Porsche focusing on making sports cars, mostly because Porsche is excellent at making sports cars. What’s that about strategic partner, though? Oh, right. MHP is being sold to TCS for $373 million, but Porsche is signing a contract with MHP for about $1.5 billion. What does Porsche get?

Porsche and TCS, together with MHP, intend to establish a partnership in the fields of digital solutions and artificial intelligence, to accelerate the development, scaling and integration of AI applications in key business areas. The aim is to further advance Porsche’s digital transformation and tap into additional potential across the entire value chain.

If you were curious where you’ve heard of TCS before, it’s because the company took over Jaguar Land Rover’s cybersecurity operations about two years before a massive ransomware attack took down JLR for weeks.

Why Did Ford Make A Deal With Apple?

While we’re talking about my weird theories, I should also mention my theory that Google being built into cars makes those cars worse. Nearly every car I’ve driven with Google Built-In is buggy as hell.

Automakers have been largely resistant to letting either Google or Apple too far into their cars, with GM turning off Car Play and Android Auto on its EVs. Ford is going the opposite direction, and announced last month that it would be incorporating Apple Maps into its new EVs.

Why? Automotive News has a little more info:

There are several different types of maps relevant for vehicle functionality. The first is a basic map used for routing and navigation, sometimes called an SD map. Automakers add a layer on top, live map data, which includes road hazards, realtime traffic and other information. The third is an advanced driver-assistance system map. This is the map that ADAS systems use to navigate the road. ADAS maps include information such as speed limit, curvature of the road and the number of lanes.

The next level up is HD maps for autonomy, and these maps have centimeter-level precision designed for autonomous vehicle operations.

As indicated by Ford’s partnership with Apple for BlueCruise, big tech has already created meaningful inroads in maps for routing, navigation and ADAS.

I don’t know, maybe I should have stuck it out as a geographer. Maps rule the world now.

Can VW’s CEO Make The Changes He Wants To Make?

I could write about the drama at Volkswagen every day, as the company’s CEO, Oliver Blume, tries to make the case that everything needs to rapidly change at the company or it’s at risk of dying. I don’t think he’s wrong, though I do think the executive leadership at Volkswagen has made a bunch of questionable decisions.

That’s the point workers seem to be making, as they contend with the prospect of massive layoffs. Blume has been out trying to persuade workers this week, but he has to deal with the reality that both the government of Lower Saxony, where a lot of these employees live, and the employees themselves have a say.

Here’s a quote from Bloomberg that is super dark and also probably correct:

“There are many enemies, many veto players and little support,” said Wolfgang Schroeder, a political science professor at Kassel University who has studied German labor relations and Volkswagen.

Pressure is also coming from above. Porsche SE, the holding company of the billionaire Porsche-Piëch family that controls Volkswagen, has urged management to move faster, warning that VW is at a “historic crossroads.” The clan has its own reason for urgency: waning profits at Volkswagen and sports-car maker Porsche AG are minimizing the dividends it’s long relied on.

GLWT.

What I’m Listening To While Writing TMD

Disney does this thing where it has covers of some of its big songs for soundtracks. The Panic! At The Disco cover of “Into The Unknown” from Frozen 2 is one of the better ones.

The Big Question

You can ban one automaker from the United States for no reason at all. Who are you banning?

Top photo: Polestar + Volvo