Hesai Technology, a Chinese tech company listed on Nasdaq specializing in parts for self-driving vehicles, has been included in a list of businesses by the U.S. Pentagon that have ties to the Chinese military. The company manufactures LiDAR road sensing equipment for various uses, including autonomous driving vehicles and delivery robots. In response to its inclusion on the Pentagon’s list, Hesai CEO Yifan “David” Li has stated that the move is “unjust, capricious and meritless” and has threatened to file a lawsuit. The company claims that its products are intended for civilian use only and have never been designed or validated for military applications.

The Pentagon’s list of organizations considered to be “Chinese military companies” also includes prominent Chinese companies such as Megvii, IDG Capital, and major energy, telecoms, and aviation companies. Hesai’s stock price has plummeted from $22 a year ago to approximately $4, and the company blames its critics for conducting an unfair commercial smear campaign against it. Despite the U.S. Department of Commerce designating Hesai’s LiDAR technology as unsuitable for military applications, the company remains adamant about contesting its inclusion on the list.

Amidst ongoing trade tensions between the U.S. and China, President Joe Biden’s administration has continued the tariffs imposed by his predecessor, Donald Trump. Biden’s administration has also taken measures to limit China’s access to advanced U.S. technology and restrict U.S. investments in strategically sensitive Chinese industries, further expanding sanctions on leading Chinese companies such as Huawei. The Defense Department updates its list of Chinese military companies periodically to counter potential links between the Chinese military and civilian companies and entities, with the recent additions sparking protests from China’s foreign and commerce ministries.

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