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Hesai Technology, a Chinese company listed on Nasdaq and specializing in LiDAR technology for autonomous vehicles, is preparing to take legal action against the US government following its inclusion on a Pentagon list of firms alleged to have military connections.

CEO Yifan “David” Li criticized the designation as “unjust, capricious, and meritless,” emphasizing that Hesai’s products are exclusively for civilian use and have never been intended or certified for military applications. The company, known for its pivotal role in advancing autonomous driving and other civilian technologies, disputes the Pentagon’s categorization alongside other entities like Megvii and IDG Capital.

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The backlash from Hesai stems from the Defense Department’s recent update to its list of “Chinese military companies,” which now features nearly four dozen firms purportedly linked to the Chinese military, a move aimed at curtailing the intertwining of China’s military advancements with its civilian sector. This action has drawn sharp criticism from China’s foreign and commerce ministries and has impacted Hesai’s stock price, which plummeted from around $22 to approximately $4 within a year. The company’s planned lawsuit echoes a successful precedent set by Xiaomi Corp., which managed to extricate itself from a similar blacklist in 2021 by denying any military affiliations.

This legal challenge comes amidst ongoing tensions between the US and China over technology and trade, with the Biden administration maintaining tariffs initiated by the Trump administration and imposing stricter controls on Chinese access to American technology. These measures include limiting investments in sensitive Chinese sectors and expanding sanctions on key Chinese corporations like Huawei Technologies.


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