- The U.S. government and Congress have recently intensified national security reviews of China's LiDAR industry, making LiDAR the new focal point of U.S.-China technological competition following semiconductors.
- As a core supplier in the global autonomous driving supply chain, Hesai Technology faces severe compliance and market access challenges after being listed on the U.S. Department of Defense's entity list, with some American clients expected to terminate cooperation soon.
- Washington policymakers are pushing legislation to restrict the use of Chinese optoelectronic technology in U.S. infrastructure, sparking widespread concerns about the decoupling of the global smart automotive industry chain and supply chain restructuring.
Rising Risks of Supply Chain Decoupling from China
In its latest financial report, Hesai Technology (02525:HK) disclosed that some American commercial clients plan to cease business relations by July 29, 2026. This move indicates that the decoupling of the supply chain in the U.S. autonomous driving sector is transitioning from policy to actual business execution. Market analysis suggests that as tech giants like NVIDIA (NVDA:US) deepen their involvement in the autonomous driving chip sector, the political risk in the downstream sensor supply chain is becoming a core variable affecting corporate valuation reassessment, with capital likely shifting to non-Chinese sensor suppliers.
Expansion of National Security Review Scope
The U.S. Department of Defense previously included Chinese LiDAR companies on the sanctions list. Although Hesai Technology has filed a lawsuit and can still sell to U.S. civilian entities, compliance concerns persist. U.S. officials worry that the high-precision point cloud data collected by LiDAR may involve sensitive infrastructure privacy. This shift in policy expectations is suppressing risk appetite in related tech sectors, leading multinational car companies to be more cautious in their technical solution choices, directly pressuring the growth of overseas orders and market share for Chinese automotive hardware companies in the short term.
Market Reassessment Triggered by Technical Vulnerability Concerns
In addition to data privacy security, academic research on potential security vulnerabilities in LiDAR systems has also prompted a market reassessment of autonomous driving safety. Tests by institutions like the University of Michigan indicate that specific beam interference could cause LiDAR systems to misjudge virtual obstacles. The exposure of this technical risk may prompt the market to reevaluate the advantages and disadvantages of LiDAR versus pure vision solutions, leading to a correction in the valuation of the smart driving segment and potentially altering the allocation ratio of funds among companies with different technological routes.
Congressional Legislation Advancement May Reshape Competitive Landscape
U.S. Congress members are actively promoting legislation aimed at gradually phasing out Chinese-made LiDAR products used in key U.S. infrastructure to reduce reliance on Chinese technology. If the bill is eventually passed, the competitive landscape of the global automotive sensor market will undergo fundamental reshaping. Increased compliance costs and potential tariff barriers may force some Chinese companies to shift their business focus to domestic markets or other overseas regions like Europe, while U.S. domestic and allied supply chain companies are expected to gain more policy benefits and market space.
