The US-China Tech War: A Chinese Company’s Fight Against Accusations
David Li, the CEO of Hesai, a Chinese company that produces laser sensors used in electric vehicles, was shocked when the US Congressional Research Service accused his company of supporting the Chinese military. This accusation led to a series of events that put Hesai’s business at risk.
The Accusation
In May last year, the US Congressional Research Service accused Hesai of supporting the Chinese military. This accusation was followed by the Pentagon adding Hesai to a list of Chinese entities alleged to be part of China’s military-civil fusion program. This move had no regulatory impact, but it created a perception of investment risk that led to a decline in Hesai’s share price.
The Fight Back
David Li decided that Hesai had to fight back against these accusations. The company sued the Pentagon in a US court in May and has since asked for a summary judgment. Li believes that the accusations are unfair and that Hesai has done nothing wrong.
The Accusations
The accusations against Hesai are based on the company’s alleged connections to the Chinese military. The Pentagon claims that Hesai is owned by, controlled by, affiliated with, or contributing to the People’s Republic of China’s military modernization or to the PRC defense industrial base. However, Hesai denies any connection to the Chinese military and claims that it has not received any investment from the Chinese government or state-linked entities.
The Technology
Hesai’s lidar sensors are controlled and operated by customers. The company claims that it does not have access to the images generated by lidar, as the technology does not have wireless connectivity and cannot be accessed remotely. Li believes that the technology is civilian and that Hesai has procedures in place to prevent the units from being directly sold to any military of any country.
The Market
Hesai has a market share of just under 50% of lidar sales to the global automotive industry and works with most of China’s top EV makers. The company’s revenues are forecast to surge to about $14 billion next year and to more than $45 billion by 2030, from less than $2 billion in 2022.
The Concerns
The US is concerned about the potential risks posed by Chinese companies like Hesai. The White House has launched an investigation into whether Chinese cars that use sensors, including lidar, and data-collection technology pose a risk to US national security. The US is also concerned about Chinese laws that require domestic firms to hand over data to the government.
Conclusion
Hesai’s fight against the accusations against it highlights the complexities of the US-China tech war. The company’s CEO, David Li, believes that the accusations are unfair and that Hesai has done nothing wrong. However, the US government remains concerned about the potential risks posed by Chinese companies like Hesai.
FAQs
Q: What is Hesai’s connection to the Chinese military?
A: Hesai denies any connection to the Chinese military and claims that it has not received any investment from the Chinese government or state-linked entities.
Q: What is the Pentagon’s accusation against Hesai?
A: The Pentagon claims that Hesai is owned by, controlled by, affiliated with, or contributing to the People’s Republic of China’s military modernization or to the PRC defense industrial base.
Q: What is Hesai’s market share of lidar sales to the global automotive industry?
A: Hesai has a market share of just under 50% of lidar sales to the global automotive industry.
Q: What is the forecast for Hesai’s revenues?
A: Hesai’s revenues are forecast to surge to about $14 billion next year and to more than $45 billion by 2030, from less than $2 billion in 2022.
Q: What is the US government’s concern about Hesai?
A: The US government is concerned about the potential risks posed by Chinese companies like Hesai, including the potential for data collection and the potential for military use of the technology.
Author: www.ft.com
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