On July 3rd, US time, LiDAR leader Hesai officially submitted a summary judgment motion against the US Department of Defense to a US court.
According to information provided by Hesai to the Daily Economic News reporter, in this motion, Hesai cited the reasons why the US Department of Defense included it in the 1260H list and refuted them one by one.
In the motion, Hesai pointed out that all of the company's products are strictly limited to commercial and civilian use, and Hesai is not related to the military of any country, which is completely inconsistent with the military nature referred to by the US Department of Defense.
Hesai sues US Department of Defense
On January 31, 2024, the US Department of Defense released an updated list of "Chinese military related enterprises" and added Hesai to the list. Hesai announced in February 2024 that it had decided to sue the US Department of Defense to defend the company's legitimate rights and interests.
Hesai believes that the US Department of Defense has violated the Federal Administrative Procedure Act, which means that the US Department of Defense ignored or misunderstood legal standards when identifying Hesai as a "Chinese military enterprise," and did not rely on "the latest available information," violating necessary administrative procedures. Throughout the entire identification process, the US Department of Defense did not fully explain its so-called "decisive basis", nor did it provide sufficient evidence to support this conclusion, let alone review the factual information submitted by Hesse. In addition, the US Department of Defense did not provide any opportunity for pre event notification or post event response.
Therefore, Hesse believes that the US Department of Defense has violated the "arbitrary and capricious" behavior prohibited by the Federal Administrative Procedure Act.
Moreover, Hesai also believes that the US Department of Defense violates the US Constitution. In the process of identifying Hesai as a "Chinese military enterprise", the US Department of Defense did not provide Hesai with the opportunity to notify and hear before the competition, depriving it of its right to equal legal protection and violating the "due process" clause of the Fifth Amendment to the US Constitution.
The accusation of military involvement has no substantive basis
In the summary judgment motion submitted this time, Hesai believes that the only reason for determining Hesai as a "military related enterprise" in the relevant reports of the US Department of Defense is its determination that Hesai has a "connection" with the Ministry of Industry and Information Technology of China (hereinafter referred to as the Ministry of Industry and Information Technology).
Regarding this, Hesai stated that simply because Hesai's entire industry is regulated by the Ministry of Industry and Information Technology does not mean there is any other "correlation" between the two. This statement is tantamount to saying that American communication giant Verizon is "related" to the Federal Communications Commission (FCC), or that Johnson&Johnson is "related" to the US Food and Drug Administration (FDA).
Hesai disclosed policies related to the automotive and intelligent sensor industries, which are supervised by the Ministry of Industry and Information Technology, in the draft A-share prospectus. The company believes that this universal policy description does not mention or imply any military affiliation.
Secondly, the US Department of Defense also accused Hesai of participating in some public business meetings and industry standard setting work, but these cannot prove any "connection" between Hesai and the Ministry of Industry and Information Technology. As a member of the automotive industry, Hesai actively participates in various public and commercial conferences as well as industry standard formulation, which is a normal business behavior.
Once again, the US Department of Defense cited the specialized and innovative "Little Giant" award awarded by the Ministry of Industry and Information Technology to Hesai and thousands of other Chinese commercial companies, but this recognition has nothing to do with military involvement. Hesai stated that the award recipients also include numerous manufacturers of daily consumer goods.
Finally, the US Department of Defense cited a wireless equipment license obtained from the Ministry of Industry and Information Technology for a methane telemetry instrument product. Regarding this, Hesai stated that the license is a general license for all wireless transmission equipment manufactured, imported, sold, and used in China, and millions of other consumer electronics companies, including Apple and Tesla, have obtained the same regulatory license for their operations in the Chinese market. This license does not prove any association between the enterprise and the Ministry of Industry and Information Technology, let alone its involvement in the military.
Therefore, Hesai once again clarifies that all products of the company are limited to civilian and commercial use and are not suitable for military purposes, and their products have also obtained US civilian certification. Hesai has no business dealings with the military of any country. Hesai is a publicly listed, privately controlled company that has never been subject to any government intervention or accepted any government equity investment. The reason why the US Department of Defense added Hesai to the 1260H list has been made public this time is without substantial evidence.