Lidar leader Hesai Technology sued the U.S. Department of Defense, saying that all products are for civilian use only

National Business Daily

2024-05-15 00:07Published on the official account of Sichuan Daily Economic News

Every reporter: Zhu Chengxiang Every editor: Yang Xia

On May 14, Hesai Technology Co., Ltd. (hereinafter referred to as "Hesai Technology"), a domestic lidar manufacturer, sued the U.S. Department of Defense because it was included in the list of so-called "Chinese military-related enterprises" by the United States. According to a complaint filed in federal court in Washington on the 13th, Hesai Technology's inclusion on the so-called 1260H list has caused it to "damage its reputation, a significant drop in its stock price, and the loss of some business opportunities." Hesai urged the court to rule that the U.S. Department of Defense remove it from the list or declare the list unconstitutional.

On the afternoon of May 14, Hesai Technology staff confirmed to the reporter of "National Business Daily" that the company had sued the U.S. Department of Defense.

Hesai Technology: All products are for civilian use only

Hesai Technology (NASDAQ: HSAI) is the world's leading LiDAR R&D and manufacturing company, whose products are widely used in passenger and commercial vehicles, autonomous vehicles, unmanned delivery vehicles, AGVs and other intelligent robot applications that support advanced driver assistance systems (ADAS), with customers in more than 40 countries around the world.

On January 31, 2024, the U.S. Department of Defense announced an updated version of "Chinese military companies" operating directly or indirectly in the United States in accordance with the statutory requirements of Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, in which a total of 73 Chinese companies were included in the 1260H list. Hesai Technology is one of them.

The announcement had a huge impact on Hesai Technology's share price, which fell 7.31% on January 31 and 31.05% on February 1.

Regarding Hesai Technology's business-related questions, the above-mentioned staff member replied that the company has issued a statement in this regard:

(1) All Hesai products are for civilian use only and have been certified for civilian use in the United States, and are not intended for military use.

(2) Hesai's LiDAR products do not have the ability to transmit data wirelessly, nor can they store point cloud image data for more than one second internally, both of which have been certified by TÜV Rheinland and Dekai, two German third-party organizations.

(3) Hesai is a publicly listed, privately held company that has never been subject to any government interference or received any government equity investment. Hesai has always adhered to compliance and upheld the principles of integrity and legal operation, and is committed to reducing accidents, saving lives, and making global travel safer.

Hesai Technology previously issued a statement regarding the incident. Image source: Hesai Technology's official website

Wind information shows that the three co-founders of Hesai Technology are Li Yifan, Sun Kai and Xiang Shaoqing, all of whom are directors of the company. Among them, Li Yifan served as CEO, Sun Kai served as chief scientist, and Xiang Shaoqing served as chief technology officer. As of February 29, Li Yifan, Sun Kai and Xiang Shaoqing held 7.77%, 8.03% and 7.77% of Hesai Technology's shares, respectively.

The current state of the LiDAR market

According to the reference news on January 9, citing the "Japan Economic News", China's electric vehicle research and development field is fiercely competitive, in order to make products stand out, lidar and other assisted driving technologies are developing rapidly. Japan, the United States and European companies have been slow to act, and companies such as Bosch in Germany have even begun to withdraw from the competition.

According to the above report, according to statistics, Hesai Technology ranked first in the automotive lidar market with a share of 47% in 2022. There are two main types of lidar, one for fully autonomous driving and the other for assisted driving. Hesai Technology has a strong presence in the field of fully autonomous driving lidar with a higher unit price. Suteng Juchuang has more advantages in the field of assisted driving lidar, and the unit price of this kind of radar is lower. The company delivered 57,000 lidars in 2022 and saw an increase in sales.

According to a research report by Guohai Securities, the AT128, Hesai's main ADAS long-range lidar product, has been launched on a number of passenger models, with a cumulative delivery of more than 300,000 units. At the 2024 Beijing Auto Show, 117 models made their world premieres, and a number of mass-produced smart models equipped with Hesai LiDAR from more than 10 well-known domestic and foreign auto brands were unveiled at the auto show.

According to the statistics of Pacific Automobile, the number of display cars equipped with lidar at the 2024 Beijing Auto Show will reach 72, and Chinese lidar brands will occupy 64 of them. Among them, RoboSense ranks first with 37 models, accounting for more than 50%.

It is worth mentioning that at the time of the filing of the complaint, the CFO of the listed company resigned on the same day. On May 13, Hesai Technology announced that Louis T. Hsieh has resigned from his position as Hesai Technology's global chief financial officer (CFO) and director of the board of directors due to personal and family reasons, with immediate effect.

Hesai Technology said that the company is very grateful for the significant contributions Hsieh has made to Hesai Technology's business, financial management, capital market transactions and corporate governance since joining in 2021.

National Business Daily

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