WASHINGTON, Oct 28 (Reuters) - Polestar said on

Monday that a proposed Biden administration rule to bar the use

of Chinese vehicle hardware and software would "effectively

prohibit" the automaker from selling vehicles in the United

States, including cars made in the U.S.

The Swedish automaker, a brand of Volvo Cars that is

majority-owned by China's Geely, said in comments

filed with the Commerce Department that a proposed rule

prohibiting Chinese connected vehicles on American roads due to

national security concerns would bar the sale of vehicles that

Polestar is building in South Carolina as well as those produced

in China.

Polestar said a substantial portion of its operations are

outside China, while seven of its 10 directors are from Europe

or the United States and its CEO is German. Polestar said it has

around 2,800 employees globally, with 280 in China.

Commerce "should consider whether a rule that effectively

shuts down the operations of a lawfully organized U.S. company

with substantial U.S. investments and so many personnel and key

decision-making units in friendly nations and the United States

is appropriately tailored to address the stated national

security concerns," Polestar said.

The Commerce Department declined to comment.

Reuters reported in May that four Chinese vehicle models are

sold in the U.S., including the Polestar 2 and Volvo's S90

sedans.

Last month,

Commerce told Reuters that General Motors ( GM ) and Ford

Motor ( F ) would need to stop importing vehicles to the U.S.

from China under the proposed rule.

Ford told Commerce on Monday in comments that the rule

could be interpreted "to prohibit the sale of completed

connected vehicles by U.S. automakers if those vehicles were

assembled within the jurisdiction of a foreign adversary such as

by a foreign affiliate of a domestic U.S. automaker."

Ford said Commerce should clarify that the vehicle

import prohibition "does not turn on the place where a connected

vehicle's final assembly happens to occur," but if it meets

software and hardware requirements.

(Reporting by David Shepardson; Editing by Sandra Maler #)