Hesai fights back against military ties accusations

In China, the leading supplier of LiDAR technology, Hesai, has publicly rejected allegations of having connections to the Chinese military. The company is awaiting a ruling from the U.S. District Court regarding its inclusion in a Department of Defense list that categorizes it alongside suppliers to the military. Hesai asserts that it maintains strict standards of business ethics and regulatory compliance, asserting that the allegations from the short-seller Blue Orca Capital are unfounded and without merit. The legal proceedings are scheduled as Hesai’s stock faced volatility following the report which accused it of misleading investors. Hesai specializes in laser sensors known as LiDAR, crucial for various applications including autonomous driving and automation in robotics. It is a major supplier for electric vehicle manufacturers in China and has also supplied technology to global companies like Cruise and Amazon's Zoox. Despite achieving profitability, recently reported as 14 million yuan, the company’s stock fell after the release of critical reports. Hesai's response to the allegations highlights their commitment to ethical practices and dispute the notion of being linked with military activities. The controversy revolves around an image-based report from Blue Orca which suggests LiDAR units from Hesai are present on military vehicles depicted in Chinese state media. Hesai’s CEO, David Li, has stated that the Department of Defense has not accused the company of supporting military operations directly. However, he acknowledged the implications of U.S. government perspectives regarding companies tied to military use, which may affect their business and investments in the U.S. market. The ongoing legal situation could have significant repercussions for Hesai’s operational capabilities and its position in the American capital markets. The company aims to clarify its stance in light of investor concerns stirred by the public accusations, while the outcome of the court decision remains uncertain. This case illustrates the tension that exists between U.S. and Chinese tech companies amid geopolitical concerns linking technology and national security. Hesai's effort to distance itself from military associations could either reassure investors or indicate deeper issues depending on the court's findings.