Chinese self-driving car supplier Hesai sues US for accusing it of military ties

Hesai Technology, a developer of sensor technologies used in self-driving cars, is suing the US Department of Defence for including it on a list of companies accused of aiding China’s military.
The Shanghai-based company’s placement on the so-called 1260H List has caused it “to suffer reputational injury, a significant drop in stock price, and lost business opportunities”, according to a complaint filed on Monday in Washington federal court.

Nasdaq-traded Hesai urged the court to order the department to remove it from the list or declare the provision unconstitutional.

The lawsuit follows other legal challenges while Donald Trump was president to the US government’s attempt to warn about companies that appear to help advance China’s military capabilities.

Hesai is a provider of sensors for smart cars. Photo: Handout

In 2021, the Biden administration agreed to remove Chinese smartphone giant Xiaomi from the list after a US court sided with the company and placed a temporary halt on the ban.

Other companies have tried to push back on the designation without going to court. IDG Capital, a venture firm with offices in Beijing and Hong Kong, said in February that it was working to clear up “confusion” over its inclusion.

Hesai provides lidar technology in self-driving cars, which is used to help avoid crashes. In April, US lawmakers urged the Pentagon to ban cars containing Chinese-produced technologies such as lidar from US military bases.

Hesai insisted that it only designed and made products for commercial and civilian uses. “No Chinese governmental or military entity has sought to exert influence or control over the Hesai Group’s management, strategy, or research-and development operations,” lawyers for company wrote in a filing.

The company also said its presence on the list disrupted its plans to build a manufacturing facility in the US with advanced discussions now on hold.

Hesai asked the court to require the Department of Defence to provide reasons for including the company on the list. The department “afforded Hesai no warning, no explanation, and no opportunity to defend itself prior to the listing”, according to the lawsuit.

The Department of Defence did not immediately respond to a request for comment.


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