Technology has moved increasingly to the forefront of the global geopolitical agenda. One of the newest technologies to emerge on the scene is LiDAR (light detection and ranging). On Nov. 27, the House Select Committee on China sent a letter to the Department of Commerce urging the administration to apply additional scrutiny to Chinese LiDAR firms. This follows the inclusion of LiDAR in the Outbound Investment Transparency Act, most recently attached as an amendment to the Senate’s version of the 2024 National Defense Authorization Act, which targeted networked lasered scanning systems, a type of LiDAR. What makes LiDAR stand out is its ability to map urban environments, peer through critical infrastructure, and create an almost video game-like reality. LiDAR also has significant military applications.
LiDAR uses remote sensing through laser pulsing to scan the surrounding environment. This technology, unlike traditional sensing tools that rely on cameras, can map locations accurately and at long ranges, regardless of light conditions and physical obstacles. It can enable autonomous navigation of self-driving cars and can advance “smart city” programs by collecting traffic and pedestrian data to improve city planning and operations. Its utility in both civilian and military applications makes LIDAR a dual-use technology. Militarily, LiDAR is used in uncrewed vehicles and drones for autonomous navigation and to create highly accurate 3D maps of battlefields, among other uses. This industry is set to rapidly expand, with the automotive LiDAR market alone expected to grow from $300 million to almost $5 billion in 2028.
There is a major debate currently unfolding in the LiDAR sector about the security risks of Chinese dominance of U.S. LiDAR markets. U.S. firms claim that Chinese LiDAR poses imminent security risks, a claim that Chinese firms dispute. Chinese LiDAR producers like Hesai argue that the Chinese government cannot access any data collected by their automotive LiDAR equipment as it does not connect to the internet and that their equipment cannot store sufficient quantities of data to pose a threat.
Beyond questions about data security, a potentially more potent concern is foreign dominance over U.S. producers, which potentially imperils the vitality of the U.S. industry overall. China has long employed coercive economic tactics to dominate strategic sectors. Government subsidies allow Chinese companies to accelerate production to flood the market with artificially cheaper goods, which can bankrupt foreign competitors. This well-established pattern has recently garnered fierce attention in the electric vehicle context.
An inability to procure domestic LiDAR would leave the United States reliant on potentially less secure foreign products and products that could ultimately be weaponized or cut off. In December 2022, China added LiDAR to a draft of the “Catalogue of Technologies Prohibited and Restricted from Export,” a Chinese government export control list, as a restricted item. While the final version of this document has not yet been published, this action could adversely impact the autonomous vehicle firms that depend on Chinese-produced LiDAR.
In 2020, the Chinese government named LiDAR a strategic emerging industry, resulting in increased state investment in the sector. Chinese companies have also been accused of unlawfully obtaining and using foreign IP. These combined actions have resulted in a U.S. LiDAR market that is now at risk of foreign takeover. For example, in the automobile LiDAR sector, Chinese company Hesai maintains a 67 percent market share in the robotaxi (autonomous vehicle) market, where Hesai supplies almost every American firm in the sector.
The U.S. government maintains a robust national security and trade toolkit designed for confronting precisely this type of problem. Advanced LIDAR models are included in the Export Administration Regulations at the Bureau of Industry and Security (BIS). If conclusive data shows real national security threats related to Chinese LiDAR, the U.S. government could add foreign LiDAR firms to additional lists, such as the Commerce Department’s Entity List, which serves as a purchasing blacklist. The U.S. government could also exercise the Treasury Department’s Non-SDN Chinese Military-Industrial Complex Companies (CMIC) list and the Defense Department’s list of Chinese Military Companies. The CMIC list identifies entities subject to sanctions due to involvement in China’s military sector, and the Defense Department list identifies Chinese military firms with some presence in the United States. Neither Hesai nor Robosense, two major Chinese LiDAR companies, are included on these lists, and their hard links to security vulnerabilities are indeed difficult to prove definitively.
This does not diminish the vulnerabilities that could arise from U.S. reliance on foreign produced LiDAR. The United States should consider initiating a new Section 301 investigation that would subject additional LiDAR technologies to tariff measures. (Some types of LiDAR are subject to a 25 percent tariff under a previous Section 301 investigation of Chinese technology.) Another potential tool is the use of the outbound screening notification regime to stem U.S. capital flows into LiDAR firms as a mechanism for bolstering sorely needed investment in U.S. firms, reducing investments into foreign LiDAR firms with possible military ties.
The U.S. government should explore these and other remedies to protect the domestic LiDAR industry. However, using trade controls to bolster national security is insufficient, and more must be done to promote American innovation in this national security critical technology sector and to promote a truly competitive U.S. LiDAR sector. Supporting immigration reform, encouraging additional incentives to pursue STEM degrees, and funding high-tech studies in secondary schools would bolster the sector and help the United States “run faster” in this race. The winner of the LiDAR race will literally map the future.
Emily Benson is director of the Project on Trade and Technology at the Center for Strategic and International Studies (CSIS). Catharine Mouradian is a program manager and research associate with the Project on Trade and Technology at CSIS.
