Hesai Stock Tumbles 8% Toward 52-Week Low, Erasing Tuesday's Rally as China Auto Supply Chain Stumbles

NEW YORK — Shares of Hesai Group fell more than 8% in early trading Wednesday, erasing a sharp gain from the previous session and moving the Chinese lidar maker closer to its lowest level of the past year.

The stock dropped $1.14 to $12.85, just above its 52-week low of about $12.36. On Tuesday, the shares had jumped about 8% to close at $13.99.

Auto supply chain under pressure

Hesai makes lidar sensors that use lasers to map a vehicle's surroundings. Its products are used in driver-assistance systems, robotaxis and robots. Its customers are mainly Chinese automakers, so the stock often moves with sentiment toward China's auto industry.

That sentiment weakened Wednesday. CATL, the world's largest maker of electric vehicle batteries, fell about 10% in Hong Kong and Shenzhen after reporting much slower third-quarter profit growth. CATL blamed fierce competition and slower growth in Chinese car sales.

Broader Chinese markets also fell. The Shanghai Composite lost 0.6%, and the Hang Seng Index dropped 0.9%, as investors worried about weak consumer demand in China. Other U.S.-listed Chinese companies, including electric vehicle maker XPeng, also declined.

The company did not announce any specific news Wednesday.

A difficult year for the stock

Hesai shares have fallen sharply in 2026. The stock is down more than 35% over the past 52 weeks and had fallen nearly 30% this year as of mid-October. It hit a 52-week high of $29.35.

Several factors have hurt the stock. Investors have pulled back from Chinese technology and semiconductor stocks on concerns that AI-related growth is slowing. Rising U.S. Treasury yields have also weighed on growth stocks. There is also concern that the United States could impose new restrictions on Chinese-made technology and robotics components.

Hesai has been caught up in tensions between the United States and China. In 2024, the Pentagon added the company to its list of firms it says have ties to the Chinese military, a claim Hesai has repeatedly denied.

Growth story intact, say supporters

Hesai's results have continued to grow. In its second quarter, revenue rose about 22% to 860.8 million yuan, or about $127 million. Even so, the shares fell after that report.

At the time, CEO David Li described Hesai as a "full-stack infrastructure platform for Robotics and Physical AI." The company also raised its full-year revenue target for its Strategic Growth Initiatives, which include robotics and other non-automotive products, to 200 million to 300 million yuan from 100 million yuan.

Chief Financial Officer Andrew Fan said he expects that business to reach about $100 million in revenue in 2027 and to break even that year.

Analysts tracked by MarketBeat have a consensus buy rating on the stock, with an average price target of about $23.50, well above current levels. Some ratings services, however, have lowered their views in recent weeks.

What to watch

Hesai's next quarterly report, expected in November, will be closely watched for shipment volumes, prices and margins. Competition and pricing pressure are increasing in China's lidar market.

In the near term, the stock is likely to keep moving with Chinese auto sales, U.S.-China trade relations and broader sentiment toward Chinese technology companies.