Chinese-owned EV maker Polestar told U.S. dealers it was blindsided by the Trump administration's decision to bar it from the U.S. market, according to an Aug. 18 letter seen by The Wall Street Journal.

The U.S. Commerce Department issued the ban June 24 as part of a crackdown on Chinese vehicle technology. Polestar said it still doesn't understand why it must cease U.S. sales while Volvo Cars—a corporate cousin selling a nearly identical car—was allowed to remain. Both share Chinese majority owner Zhejiang Geely Holding Group and build two models on the same production line in South Carolina.

Polestar said Commerce officials had signaled approval was likely, and after Volvo's application was approved in May, Polestar's was denied the following month. The company sold fewer than 6,000 cars in the U.S. last year. One dealer is suing Polestar for at least $25 million in damages. Polestar said it won't appeal the denial and will focus on European sales.