Hesai (HSAI) shot up last week after announcing an “exclusive multi-year” contract to supply a top European automaker with its LiDAR (Light Detection and Ranging) sensors.
The Shanghai-based company didn’t disclose the automaker’s name, but Reuters later confirmed it was Mercedes-Benz, marking “the first time a foreign automaker has sought to use such Chinese-made technology for models sold outside China.”
According to Reuters, Mercedes deliberated for months over the decision, weighing legal and geopolitical risks before choosing Hesai for its lower costs and ability to produce at scale.
Mercedes will use Hesai’s laser-assisted radars in next-generation smart driving vehicles designed for global markets.
HSAI soared 50% on news of the deal but slipped in early Tuesday trading after Blue Orca Capital disclosed a short position, accusing the company of misrepresenting its business and financial disclosures.
Earnings boost the rally
Hesai’s solid Q4 and full-year earnings added fuel to last week’s surge. The company posted $98.6 million in Q4 revenue, up 28.3% year-over-year, and a record $284.6 million in annual revenue.
Hesai has now doubled its annual product delivery volume for four consecutive years — a rare feat in the LiDAR space.
It also became the first listed LiDAR company to achieve full-year profitability, positive operating cash flow, and net cash flow, according to CFO Andrew Fan.
Fan told Reuters that while European automakers have been using Hesai’s LiDAR for years, they’ve only deployed it in vehicles sold in China—until now.
Why Hesai isn’t sweating Trump’s tariffs
With Trump’s 20% tariffs on Chinese products already in place — and another round expected in April — many Chinese exporters are bracing for impact. But Hesai isn’t too worried.
“Our U.S. revenue is really less than 10% of our total,” CEO David Li told CNBC. “So it’s a smaller challenge for us.”
He also pushed back against the idea that tariffs would hurt Hesai’s competitiveness, arguing that its high-end pricing already sets it apart from cheaper alternatives.
“We win the market because we have the best quality and performance,” Li said.
Hesai’s relationship with the U.S. government has already been rocky.
The company sued the U.S. Department of Defense last year after being placed on the 1260H list as a Chinese military-linked company.
“Hesai has always maintained that we were wrongly added to the 1260H list,” the company said, stressing that its products are strictly for civilian and commercial use and that it has no military ties.
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