The U.S. Department of Defense (DoD) has once again placed Chinese laser radar manufacturer Hesai on the blacklist after a review of the latest information, citing the company’s suspected cooperation with the People’s Liberation Army of China.
According to a court document from the U.S. Department of Justice dated October 16th and a letter signed by U.S. Deputy Secretary of Defense Kathleen Hicks sent to Congress, Hesai has been reintroduced to the list of sanctioned entities.
The court document shows that the Department of Defense removed Hesai from the entity list based on original data and subsequently determined that it still met the requirements for inclusion in the list under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021 based on new information. The Department of Defense will announce this decision in the Federal Register in the next few days.
The Department of Defense stated that if Hesai requests, it will promptly provide the company with a review analysis report supporting this latest decision.
According to Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, the U.S. Department of Defense has successively listed 73 Chinese companies as “Chinese military-related enterprises.” Hesai was added to this list on January 31, 2024.
The U.S. Congress passed this legislation in 2021, requiring the Pentagon to compile this list. The law aims to strengthen scrutiny of Chinese companies operating in the United States, alleging that these Chinese enterprises help the People’s Liberation Army achieve modernization through military-civil fusion programs.
Based in Shanghai and listed on Nasdaq, Hesai previously filed a lawsuit in May this year challenging the U.S. government’s decision, claiming that no Chinese (Communist) government or military entity attempted to influence or control its management, strategy, or research and development operations.
According to Reuters, Hesai has stated that being listed under Section 1260H has caused “severe damage to reputation, a significant drop in stock prices, and loss of business opportunities,” leading them to demand that a U.S. district court order the government to remove them from the list.
Hesai previously argued that its laser radar does not have wireless storage or image transmission capabilities and therefore does not pose a threat.
However, according to a report by the U.S.-China Economic and Security Review Commission (USCC) in 2023, Hesai’s core product is a LiDAR sensor system used for autonomous vehicles, a technology the U.S. military has identified as having broad battlefield applications.
For national security reasons, on September 23, the U.S. Department of Commerce proposed banning the use of Chinese software and hardware in networked vehicles driving on U.S. roads. According to the results of an investigation by the Bureau of Industry and Security (BIS) of the Department of Commerce, certain technologies from China or Russia pose an undue risk to U.S. critical infrastructure and individuals using networked vehicles.
U.S. media reported that some Chinese military entities on the blacklist attempted to continue operations in the U.S. through means such as renaming and signing authorization agreements.
The Wall Street Journal revealed in May that in December 2023, Hesai registered a company called American Lidar in Michigan, near the headquarters of the top three U.S. automakers. However, there was no mention of Hesai in the registration information of American Lidar.
Following its inclusion on the Department of Defense blacklist, Hesai’s stock plummeted by 30% in one day. The company later halted the construction plans of American Lidar, attributing it to the blacklisting by the U.S. authorities.