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Will it be removed from the US Department of Defense blacklist? Hesai Technology responds

2024-08-14

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Introduction: Hesai Technology formally sued the US Department of Defense in May, demanding that it be removed from the list. In July, Hesai Technology asked the Washington Federal Court to make a summary judgment on the matter, and the hearing is scheduled for September.

(Text/Zhou Shengming Editor/Gao Xin)

Recently, the Financial Times reported that according to multiple people familiar with the matter, the US Department of Defense has decided to remove Hesai Technology from the "blacklist of Chinese military-affiliated companies" because the Pentagon believes that the world's largest electric vehicle lidar manufacturer does not meet the statutory standards for being blacklisted.

U.S. government lawyers are concerned that the reasons for putting the Chinese company on the list would not stand up to legal scrutiny under the criteria outlined in the 2021 legislation, people familiar with the matter said.

In response to this, Hesai Technology told Observer.com: "We have not yet received any confirmation from the US Department of Defense. We have no comment on this matter."

Hesai emphasized that the decision of the US Department of Defense to include Hesai in the list of "Chinese military-related enterprises" is wrong, unfair and unfounded. All of the company's lidar products are strictly limited to commercial and civilian use, and Hesai has no connection with the military of any country.

In January this year, the US Department of Defense blacklisted 15 Chinese companies including Hesai Technology. In May, Hesai Technology formally sued the US Department of Defense, demanding that it be removed from the list. In July, Hesai Technology asked the Washington Federal Court to make a summary judgment on the matter, and a hearing is scheduled for September.

The Pentagon said it would not comment on the Hesai Technology case because the lawsuit is still ongoing. The White House also did not comment. The Financial Times said that the Chinese Embassy in the United States expressed its pleasure to see the United States correct its discriminatory practices and provide a fair, just and non-discriminatory business environment for Chinese companies.

It is reported that Hesai Technology was founded in Shanghai in 2014. It is a global LiDAR R&D and manufacturing company. The company's products are widely used in passenger cars and commercial vehicles supporting advanced driver assistance systems (ADAS), as well as self-driving cars. Hesai's LiDAR technology is also committed to enabling various robot applications, such as unmanned delivery vehicles and logistics robots in closed areas.

At present, Hesai's 128-line ultra-high-definition long-range LiDAR AT128 has received orders totaling millions of units from 11 OEMs including Ideal, Jidu, HiPhi, and Lotus.

On February 9, 2023, the company was listed on the Nasdaq Stock Exchange in the United States, becoming the largest Chinese company to raise funds in the United States since 2021, and the first Chinese company to raise more than US$100 million in the United States since October 2021. The Financial Times reported that Hesai has nearly 50% of the global automotive industry's lidar market share. In 2023, the company's revenue of RMB 1.8 billion came from the US market, accounting for about 40%.

The U.S. Department of Defense included Hesai Technology on the "Chinese military-industrial enterprise" blacklist in January this year, and now it has been removed from the blacklist. The Financial Times called it an "embarrassing reversal" for the U.S. Department of Defense. It is reported that such an "embarrassing reversal" is not the first time-in 2021, the Pentagon removed Chinese smartphone manufacturer Xiaomi from the blacklist after the court ruled that there was insufficient evidence to prove that it could be blacklisted.

However, the Financial Times quoted Pamir Consulting Chief Intelligence Officer Mulvenon as saying that the US Congress may update the 2021 law to allow the Pentagon to put Hesai back on the blacklist.

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