Hesai Notices an Appeal
Rhea-AI Summary
Hesai Group (NASDAQ: HSAI), a global leader in lidar solutions, has filed an appeal on July 13, 2025, challenging the U.S. District Court's decision that upheld their designation under Section 1260H of the National Defense Authorization Act.
The District Court's ruling was based on two factors: the location of Hesai's R&D centers in certain industrial districts and the theoretical potential of lidar technology for military applications. Notably, the Court acknowledged no evidence was found linking Hesai's products to military use or connecting the company to the Chinese military.
CEO Yifan "David" Li expressed strong disagreement with the decision, emphasizing that Hesai's products are solely for civilian and commercial uses. The company remains committed to serving its global customers while maintaining transparency as a Nasdaq-listed entity.
Positive
- District Court found no evidence of Hesai's products being used for military purposes
- Court acknowledged no direct or indirect connection between Hesai and Chinese military
- Company maintains strong position in global lidar solutions market
Negative
- U.S. Department of Defense's designation under Section 1260H remains in effect
- Court ruling based on geographic location of R&D centers could impact operations
- Legal challenges may create uncertainty for stakeholders
Insights
Hesai appeals DoD's designation linking it to Chinese military despite court acknowledging no evidence of actual military connections.
Hesai Group's appeal to the U.S. Court of Appeals represents a significant legal challenge against its designation under Section 1260H of the National Defense Authorization Act. This designation effectively links Hesai to the Chinese military-industrial complex, despite the District Court acknowledging there's no evidence that Hesai's products have been used for military purposes or that there's any direct or indirect connection between Hesai and the Chinese military.
The District Court's decision appears to rest on two tenuous factors: the geographic location of Hesai's R&D centers and the theoretical potential of lidar technology for military applications. These justifications are notably speculative and could potentially apply to numerous companies operating in China, including American and international firms.
This case highlights the increasingly complex regulatory environment for Chinese companies operating in the U.S. market. The designation under Section 1260H could have material implications for Hesai's ability to access U.S. investment capital and possibly impact its business relationships with U.S. entities. Should Hesai fail in its appeal, it may face heightened scrutiny and potential restrictions that could affect its operational capabilities in Western markets.
For context, Section 1260H designations identify companies as "Communist Chinese military companies" operating in the U.S., which carries reputational damage and potential business consequences, even without immediate sanctions. Hesai's vigorous legal challenge indicates the company recognizes the serious business implications of this designation.
SHANGHAI, China, July 14, 2025 (GLOBE NEWSWIRE) -- Hesai Group (“Hesai” or the “Company”) (NASDAQ: HSAI), the global leader in three-dimensional light detection and ranging (lidar) solutions, today announces that it has filed a Notice of Appeal to the U.S. Court of Appeals on July 13, 2025, to challenge the decision of the U.S. District Court for the District of Columbia (“District Court”), which upheld the U.S. Department of Defense’s (DoD) designation of the Company under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021.
“We are deeply disappointed by the District Court’s ruling and respectfully disagree with its decision. We believe the DoD’s designation lacks both factual and legal bases,” said Yifan “David” Li, the CEO of Hesai. “We are appealing to the U.S. Court of Appeals, and we will vigorously pursue all legal avenues to protect our reputation and seek fair treatment.”
Critically, the District Court acknowledged that the DoD found no evidence that Hesai’s products have been used for military purposes, nor any evidence of a direct or indirect connection between Hesai and the Chinese military — fundamental facts Hesai has maintained all along.
Instead, the District Court based its ruling solely on two factors: the geographic location of Hesai’s R&D centers within certain industrial districts, and the theoretical potential that technologies such as lidar could have military applications. These speculative rationales—which could apply equally to countless other companies operating in China, including American and international companies—fall far short of demonstrating that Hesai has actually contributed to the military in any way, as the statute requires.
Hesai has never developed, supplied, or certified products for military use, as its products are solely for civilian and commercial uses. Hesai will continue to defend its integrity and pursue appropriate legal remedies. At the same time, Hesai remains focused on delivering cutting-edge lidar solutions to its global customers and maintaining its unwavering commitment to transparency and good corporate governance as a Nasdaq-listed company.
About Hesai
Hesai Group (Nasdaq: HSAI) is a global leader in lidar solutions. The company’s lidar products enable a broad spectrum of applications including passenger and commercial vehicles (“ADAS”), as well as autonomous driving vehicles and robotics and other non-automotive applications such as last-mile delivery robots and AGVs (“Robotics”). Hesai seamlessly integrates its in-house manufacturing process with lidar R&D and design, enabling rapid product iteration while ensuring high performance, high quality and affordability. The company’s commercially validated solutions are backed by superior R&D capabilities across optics, mechanics, and electronics. Hesai has established offices in Shanghai, Palo Alto and Stuttgart, with customers spanning more than 40 countries.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
Hesai Group
Email: ir@hesaitech.com
Christensen Advisory
Tel: +86-10-5900-1548
Email: hesai@christensencomms.com
Source: Hesai Group
FAQ
What is the recent legal challenge filed by Hesai Group (NASDAQ: HSAI)?
Why did the U.S. District Court uphold Hesai's designation under Section 1260H?
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