0001104659-23-047439 | 20-F | XBRL Viewer

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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2022 shares
Document Information
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2022
Entity File Number	001-41611
Entity Registrant Name	Hesai Group
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	9th Floor, Building L2-B
Entity Address, Adress Line Two	1588 Zhuguang Road, Qingpu District
Entity Address, City or Town	Shanghai
Entity Address, Postal Zip Code	201702
Entity Address, Country	CN
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Accounting Standard	U.S. GAAP
Entity Shell Company	false
Entity Central Index Key	0001861737
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Deloitte Touche Tohmatsu Certified Public Accountants LLP
Auditor Location	Shanghai, the People’s Republic of China
Auditor Firm ID	1113
American depositary shares
Document Information
Title of 12(b) Security	American depositary shares, each representing one Class B ordinary share
Trading Symbol	HSAI
Security Exchange Name	NASDAQ
Class B ordinary share
Document Information
Title of 12(b) Security	Class B ordinary share, par value US$0.0001 per share
No Trading Symbol Flag	true
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	85,501,214
Class A ordinary share
Document Information
Entity Common Stock, Shares Outstanding	30,033,379
Business Contact
Document Information
Contact Personnel Name	Louis T. Hsieh, Global Chief Financial Officer
Entity Address, Address Line One	9th Floor, Building L2-B
Entity Address, Adress Line Two	1588 Zhuguang Road, Qingpu District
Entity Address, City or Town	Shanghai
Entity Address, Postal Zip Code	201702
Entity Address, Country	CN
Contact Personnel Email Address	ir@hesaitech.com
Country Region	+86
City Area Code	21
Local Phone Number	3158-8240

COMBINED AND CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Current assets:
Cash and cash equivalents	¥ 913,277	$ 132,413	¥ 449,352
Short-term investments	945,865	137,138	2,342,743
Accounts receivable, net (net of allowance of RMB7,294 and RMB6,249 as of December 31, 2021 and 2022, respectively)	485,044	70,325	85,821
Contract assets, net (net of allowance of RMB1,223 and RMB459 as of December 31, 2021 and 2022, respectively)	12,600	1,827	146,537
Amounts due from related parties (net of allowance of nil and nil as of December 31, 2021 and 2022, respectively)	5,021	728	3,543
Inventories	646,852	93,785	376,244
Prepayments and other current assets	126,452	18,333	89,119
Total current assets	3,135,111	454,549	3,493,359
Property and equipment, net	504,953	73,211	321,627
Long-term investments	31,856	4,619	1,902
Intangible assets, net	20,600	2,987	19,553
Land-use rights, net	41,606	6,032	42,470
Goodwill	3,823	554	3,499
Right-of-use assets	44,349	6,430
Other non-current assets	57,098	8,278	69,959
Total non-current assets	704,285	102,111	459,010
TOTAL ASSETS	3,839,396	556,660	3,952,369
Current liabilities:
Accounts payable	206,681	29,966	77,271
Contract liabilities	40,378	5,854	122,603
Amounts due to related parties	334,283	48,466	307,498
Accrued warranty liability	17,694	2,565	13,932
Accrued expenses and other current liabilities	356,502	51,689	370,854
Total current liabilities	955,538	138,540	892,158
Deferred tax liabilities	439	64	466
Lease liabilities	10,139	1,470
Long-term borrowings	18,472	2,678
Other non-current liabilities	13,075	1,896	9,924
Total non-current liabilities	42,125	6,108	10,390
TOTAL LIABILITIES	997,663	144,648	902,548
Commitments and contingencies (Note 25)
Mezzanine equity:
MEZZANINE EQUITY	5,986,910	868,020	5,540,491
Shareholders' deficit
Subscription receivables	(310,227)	(44,979)	(310,227)
Accumulated other comprehensive income (loss)	(3,608)	(523)	8,465
Accumulated deficit	(2,831,381)	(410,512)	(2,188,947)
Total Shareholders' deficit	(3,145,177)	(456,008)	(2,490,670)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	3,839,396	556,660	3,952,369
Class A
Shareholders' deficit
Ordinary shares	19	3	19
Class B
Shareholders' deficit
Ordinary shares	¥ 20	$ 3	¥ 20

COMBINED AND CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares
Allowance for accounts receivables \| ¥	¥ 6,249	¥ 7,294
Allowance for contract assets \| ¥	459	1,223
Allowance for amounts due from related parties \| ¥	¥ 0	¥ 0
Redeemable shares, issued	54,551,513	54,551,513
Redeemable shares, outstanding	54,551,513	54,551,513
Class A
Ordinary shares, authorized	35,000,000	35,000,000
Ordinary shares, issued	30,033,379	30,033,379
Ordinary shares, outstanding	30,033,379	30,033,379
Class B
Ordinary shares, authorized	150,000,000	150,000,000
Ordinary shares, issued	30,949,701	30,949,701
Ordinary shares, outstanding	30,949,701	30,949,701

COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Net revenues (including revenues from related parties of RMB41,765, RMB15,655 and nil for the years ended December 31, 2020, 2021, and 2022 respectively)	¥ 1,202,670	$ 174,371	¥ 720,768	¥ 415,514
Cost of revenues	(730,683)	(105,939)	(338,972)	(176,600)
Gross Profit	471,987	68,432	381,796	238,914
Operating expenses:
Sales and marketing expenses	(104,835)	(15,200)	(69,266)	(49,904)
General and administrative expenses	(201,007)	(29,143)	(236,713)	(76,553)
Research and development expenses	(555,179)	(80,493)	(368,435)	(229,653)
Other operating income, net	10,817	1,568	27,333	15,384
Total operating expenses	(850,204)	(123,268)	(647,081)	(340,726)
Loss from operations	(378,217)	(54,836)	(265,285)	(101,812)
Interest income	58,734	8,516	32,584	20,925
Foreign exchange (loss) gain, net	20,858	3,024	(13,275)	(25,696)
Other (loss) income, net	(2,161)	(313)	118	(828)
Net loss before income tax and share of loss in equity method investments	(300,786)	(43,609)	(245,858)	(107,411)
Income tax benefit	66	10	1,115	199
Share of loss in equity method investment	(45)	(7)	(84)	(4)
Net loss	(300,765)	(43,606)	(244,827)	(107,216)
Deemed dividend	(446,419)	(64,725)	(2,211,330)
Net loss attributable to ordinary shareholders of the Company	¥ (747,184)	$ (108,331)	¥ (2,456,157)	¥ (107,216)
Net loss per share:
Basic \| (per share)	¥ (6.47)	$ (0.94)	¥ (23.39)	¥ (1.19)
Diluted \| (per share)	¥ (6.47)	$ (0.94)	¥ (23.39)	¥ (1.19)
Weighted average shares used in calculating net loss per share:
Basic	115,534,593	115,534,593	104,987,478	89,895,471
Diluted	115,534,593	115,534,593	104,987,478	89,895,471
Net loss	¥ (300,765)	$ (43,606)	¥ (244,827)	¥ (107,216)
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments	(12,073)	(1,750)	9,083	(1,950)
Comprehensive loss	¥ (312,838)	$ (45,356)	¥ (235,744)	¥ (109,166)

COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Revenues from related parties \| ¥	¥ 0		¥ 15,655		¥ 41,765
Other comprehensive income (loss), tax \| $		$ 0		$ 0		$ 0

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07.1(c))
-URI https://asc.fasb.org/extlink&oid=120401555&loc=SL114874292-224272

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.1(e))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

+ Details

COMBINED AND CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands	Class A Ordinary shares CNY (¥) shares	Class B Ordinary shares CNY (¥) shares	Additional paid-in capital CNY (¥)	Subscription receivables CNY (¥)	Accumulated deficit CNY (¥)	Accumulated other comprehensive income (loss) CNY (¥)	CNY (¥)	USD ($)
Beginning balance at Dec. 31, 2019					¥ (170,759)	¥ 1,332	¥ (169,427)
Net loss					(107,216)		(107,216)
Foreign currency translation						(1,950)	(1,950)
Conversion to joint stock company as part of 2020 Reorganization			¥ (221,929)		221,929
Conversion of redeemable equity to ordinary shares as part of the 2020 Reorganization			1,098,639				1,098,639
Issuance of shares of Shanghai Hesai to new investors			317,147				317,147
Balance as of ending at Dec. 31, 2020			1,193,857		(56,046)	(618)	1,137,193
Net loss					(244,827)		(244,827)
Foreign currency translation						9,083	9,083
Issuance of ordinary shares in connection with the 2021 Reorganization	¥ 19	¥ 40	(59)	¥ (310,227)			(310,227)
Issuance of ordinary shares in connection with the 2021 Reorganization (in shares) \| shares	30,033,379	62,834,548
Reclassification of ordinary shares to redeemable shares		¥ (20)	(1,193,798)		(1,862,599)		(3,056,417)
Reclassification of ordinary shares to redeemable shares (in shares) \| shares		(31,884,847)
Share-based compensation			54,283				54,283
Accretion in redemption value of redeemable shares			(54,283)		(25,475)		(79,758)
Balance as of ending at Dec. 31, 2021	¥ 19	¥ 20		(310,227)	(2,188,947)	8,465	(2,490,670)
Balance as of ending (in shares) at Dec. 31, 2021 \| shares	30,033,379	30,949,701
Net loss					(300,765)		(300,765)	$ (43,606)
Foreign currency translation						(12,073)	(12,073)	(1,750)
Share-based compensation			104,750				104,750
Accretion in redemption value of redeemable shares			¥ (104,750)		(341,669)		(446,419)
Balance as of ending at Dec. 31, 2022	¥ 19	¥ 20		¥ (310,227)	¥ (2,831,381)	¥ (3,608)	¥ (3,145,177)	$ (456,008)
Balance as of ending (in shares) at Dec. 31, 2022 \| shares	30,033,379	30,949,701

COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Cash flows from operating activities:
Net loss	¥ (300,765)	$ (43,606)	¥ (244,827)	¥ (107,216)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	53,634	7,776	28,231	19,215
Share-based compensation	105,219	15,255	54,283
Provision for (reversal of) allowance for credit loss	(1,810)	(262)	2,561	4,174
Loss from disposal of property and equipment	369	53	169	28
Fair value change of short-term investments	4,878	707	(7,717)
Loss from equity in earnings of subsidiaries	45	7	84	4
Foreign exchange loss (gain), net	(5,868)	(851)	10,945	21,503
non-cash lease expenses	30,260	4,387
Inventory write-down	39,431	5,717	16,600	7,060
Changes in operating assets and liabilities:
Accounts receivable	(390,859)	(56,670)	(31,696)	(22,578)
Contract assets	134,244	19,464	(108,737)	(39,024)
Inventories	(305,553)	(44,301)	(237,755)	(83,607)
Prepayments and other current assets	(33,556)	(4,865)	(48,618)	(8,790)
Amounts due from related parties			24,788	(20,842)
Non-current assets	2,883	418	(5,573)	(4,100)
Amounts due to related parties				(2,906)
Contract liabilities	(91,737)	(13,301)	113,265	(2,569)
Deferred tax liabilities	(27)	(4)	(113)	(156)
Accounts payable	128,863	18,683	21,834	36,258
Income tax payable			(9)	(1,268)
Accrued expenses and other current liabilities	(41,074)	(5,955)	170,125	(143,526)
Operating leases liabilities	(30,103)	(4,365)
Other non-current liabilities	5,511	799	13,774	(3,675)
Net cash used in operating activities	(696,015)	(100,914)	(228,386)	(352,015)
Cash flows from investing activities:
Purchases of short-term investments	(5,586,764)	(810,005)	(4,812,942)	(2,001,137)
Maturity of short-term investments	6,978,764	1,011,826	3,114,287	2,256,724
Proceeds from disposals of property and equipment			22	19
Purchases of property and equipment	(231,210)	(33,523)	(220,096)	(66,000)
Purchases of land-use right			(43,188)
Purchases of intangible assets	(9,180)	(1,331)	(18,320)	(10,579)
Purchases of equity securities	(30,000)	(4,350)
Advances to a related party	(1,964)	(285)
Net cash provided (used in) by investing activities	1,119,646	162,332	(1,980,237)	179,027
Cash flows from financing activities:
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization			(507,620)
Cash contribution from shareholders in connection with the 2021 Reorganization			507,620
Proceeds from issuance of equity shares of Shanghai Hesai				317,147
Proceeds from issuance of convertible loans			1,950,338
Proceeds from issuance of ordinary shares of Hesai Group			453,978
Return of advances to employees in connection with share option grants			(590)	6,290
Proceeds from long-term borrowings	18,472	2,678
Payment of offering cost	(3,296)	(478)
Net cash provided by financing activities	15,176	2,200	2,403,726	323,437
Net increase in cash and cash equivalents	438,807	63,618	195,103	150,449
Cash and cash equivalents, beginning of the year	449,352	65,150	256,688	112,737
Effect of foreign exchange rate changes on cash and cash equivalents	25,118	3,645	(2,439)	(6,498)
Cash and cash equivalents, end of the year	913,277	132,413	449,352	256,688
Supplemental disclosure of cash flow information:
Income taxes (return) paid	(1,230)	(178)	213	(8,662)
Capitalized interest paid	11	2
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible loans to redeemable shares			1,950,338
Accrued purchases of property and equipment	102,181	14,815	114,446	3,823
Accrued offering cost	480	70
Deferred government subsidy applied to purchases of property and equipment			3,850	¥ 30,000
Deemed dividend	¥ 446,419	$ 64,725	¥ 2,211,330

ORGANIZATION AND NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2022

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

1.ORGANIZATION AND NATURE OF OPERATIONS

Description of Business and Corporate History

Hesai Group (the “Company”) was incorporated under the laws of the Cayman Islands on April 21, 2021. The Company, together with its subsidiaries (collectively, the “Group”) is primarily engaged in the development, manufacture and sales of 3-dimensional light detection and ranging solutions, or LiDAR.

History of the Group

The Group’s history began in October 2014 with the establishment of Shanghai Hesai Photonics Co., Ltd. (“Hesai Photonics”), a limited liability company established in the People’s Republic of China (the “PRC”) by Mr. Kai Sun, Mr. Yifan Li and Mr. Shaoqing Xiang (collectively known as the “Founding Shareholders”). In August 2020, Hesai Photonics was converted by its then shareholders into a joint stock company under the PRC law and changed its name to Hesai Technology Co., Ltd (“Shanghai Hesai”).

2021 Reorganization

In 2021, the Founding Shareholders and all of the investors of Shanghai Hesai undertook an equity restructuring in order to re-domicile its business from the PRC to the Cayman Islands (the “2021 Reorganization”), which was executed in the following steps:

In April 2021, the Company was incorporated in the Cayman Islands to be the holding company of the Group. On May 6, 2021, the Company established Hesai Hong Kong Limited (“Hesai HK”) in Hong Kong, a wholly owned subsidiary to be the intermediate holding company.

In June 2021, the Company through Hesai HK acquired 100% of the equity interest of Shanghai Hesai from the Founding Shareholders and its investors, thus Shanghai Hesai became the wholly owned subsidiary of the Company.

In May and June 2021, the Founding Shareholders subscribed to 30,033,379 Class A ordinary shares and the existing investors subscribed to 62,834,548 Class B ordinary shares of the Company, on an as-converted basis, at the same proportion of the equity interest they held in Shanghai Hesai.

The main purpose of the 2021 Reorganization was to establish a Cayman holding company for the existing business in preparation for an overseas initial public offering. The Group has accounted for the 2021 Reorganization as transaction between entities with common ownership, which is akin to a reorganization of entities under common control. Upon completion of the 2021 Reorganization, per share information of the Company has been retrospectively presented from the earliest period in the combined and consolidated financial statements presented.

Pursuant to a framework agreement entered into by the Founding Shareholders and all of the investors of Shanghai Hesai, the consideration paid by the Company to acquire the equity interest of Shanghai Hesai is to be reinvested in the Company as capital contribution for subscription of ordinary shares at Hesai Group. For the recapitalization in connection with the 2021 Reorganization, only RMB 817,847 was required to be settled through cash redemption by Shanghai Hesai and cash investment at the Company level in accordance with foreign currency control regulations within the PRC. RMB 507,620 has been settled during 2021 with the remaining of RMB 310,227 recorded as subscription receivable as December 31, 2021 pending relevant government approval (See Note 21).

The shareholder further agreed that for certain shareholders, mainly the Founding Shareholders and a few early investors, given that they are liable to make capital gain tax payments to the PRC tax bureau for the sales of their equity interest in Shanghai Hesai, their capital contribution amount at the Cayman level can be done net of the tax liabilities incurred. These tax payments amounted to RMB 82,347, which are recorded as general and administrative expenses as they represented tax costs absorbed by the Group as part of the reorganization only for a few investors and not considered to be pro-rata distribution to all shareholders.

1.ORGANIZATION AND NATURE OF OPERATIONS (continued)

Initial Public Offering

In February and March 2023, the Company, in connection with its initial public offering (“IPO”) in the United States, issued 10,125,118 Class B Ordinary shares with net proceeds from the IPO of approximately US$179,800.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The combined and consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of Consolidation

The financial statements presented herein represent (1) prior to the 2021 Reorganization, the financial statements of Shanghai Hesai and its subsidiaries; (2) subsequent to the 2021 Reorganization, the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Use of estimates

The preparation of combined and consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Group’s management reviews these estimates based on information that is currently available. Changes in facts and circumstances may cause the Group to revise its estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include the estimated project progress towards certain services revenue, warranty reserves, right-of-use assets, lease liabilities, inventory write-down, allowance for doubtful accounts, the useful lives of property and equipment, intangible assets and land-use rights, valuation of ordinary shares and share-based compensation.

Fair value measurements

The established fair value hierarchy as defined by U.S. GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include:

Level 1 Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

Level 2 Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurements – continued

Level 3 Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Group’s financial instruments include cash and cash equivalents, accounts receivable, short-term investments, amounts due from/to related parties, other receivables included in other current assets, accounts payable, other current liabilities, and long-term borrowings. With the exception of short-term investments, the carrying amounts of the short-term financial instruments approximate their fair values due to their short-term nature. The fair value of long-term borrowings is approximate to their carry amounts because the annual interest rates of such borrowings are the similar to the prevailing market annual interest rate.

Short-term investments consisted of structured deposits with commercial banks in the PRC. These structured deposits are financial instruments with variable interest rates indexed mainly to exchange rates and/or price of commodities. In accordance with ASC 820, Fair Value Measurement, the Group elected the fair value option at the date of initial recognition to measure structured deposits at fair value on a recurring basis with changes in the fair value are recorded as interest income in the combined and consolidated statements of operations and comprehensive loss. The fair values of these short-term investments as of December 31, 2021 and 2022 were determined to be RMB2,342,743 and RMB945,865 using Level 2 significant other observable input by applying the interest rate implied by the current quotation of underlying indices.

Functional currency and foreign currency translation

The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiary located outside of PRC is the United States dollar (“US$”), and the functional currency of subsidiaries located in PRC is RMB.

Assets and liabilities are translated from each entity’s functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive income (loss) in the combined and consolidated statements of changes in shareholders’ deficit.

Monetary assets and liabilities denominated in currencies other than the entity’s applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized as foreign exchange (loss) gain, net in the combined and consolidated statements of operations and comprehensive loss.

Cash and cash equivalents

The Group classifies cash on hand and cash in bank with original maturities of three months or less, and are unrestricted as to withdrawal or use, as cash and cash equivalents.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable, net

Accounts receivable mainly consists of amount due from the Group’s customers, which are recorded net of allowance for credit losses. The Group divides its portfolio into two pools — domestic PRC customers and overseas customers for the purposes of performing ongoing credit evaluation by reviewing their credit rating and industry geographic distribution and assessing allowance for credit loss based on expected credit loss model for each pool of the portfolio. The Group develops a current expected credit loss (“CECL”) model based on historical collection experience, the age of the accounts receivable balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. Account receivable balances are written off after all collection efforts have been exhausted.

Inventories

Inventories consists of raw materials, work-in-process, and finished goods and are stated at lower of cost or net realizable value. Costs are computed under the weighted average method. Net realizable value is determined as estimated selling prices in the ordinary course of business, less reasonably predictable costs to sell. Valuation of inventories is based on currently available information about expected recoverable value. The estimate is dependent upon factors such as market trends, inventory ageing, and historical and forecasted customer demands. Inventory write-down is recorded as cost of revenues.

Property and equipment, net

Property and equipment is stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated at rates sufficient to write off its costs less impairment, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows:

Electronic equipment		3 – 5 years
Machinery and equipment		10 years
Furniture and fixture		5 years
Transportation vehicles		4 years
Leasehold improvements		Over the shorter of the expected lease term or useful lives

Intangible assets, net

Intangible assets are recognized and measured at cost upon acquisition. Following the initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The identifiable intangible assets acquired are amortized on a straight-line basis over the respective useful lives as follows:

Software		3 – 10 years
Technology		3 – 5 years

Land-use rights, net

Land-use rights are recognized and measured at cost upon acquisition. Following the initial recognition, land-use rights are carried at cost less any accumulated amortization and any accumulated impairment losses. According to the land-use rights policy in the PRC, the useful life of land-use rights is 50 years.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets and liabilities acquired in a business combination in connection with acquisition of 100% equity interests of Oxigraf Inc. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. In evaluation of goodwill impairment, the Group has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. If the Group chooses to apply a qualitative assessment first, it starts the goodwill impairment test by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Group determines that it is more likely than not the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of comparison of the fair value of a reporting unit to its carrying amount.

Application of a goodwill impairment test requires significant management judgments, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

No goodwill impairment was recorded for the years ended December 31, 2020, 2021 and 2022.

Long-term investments

Investment in equity method investee

The Group uses equity method to account for common stock investments in entities over which it has significant influence but does not have controlling interests. Under the equity method of accounting, the Group’s share of the earnings or losses of the investee companies, impairments, and other adjustments required by the equity method are reflected in the combined and consolidated statements of operations and comprehensive loss. When the Group’s share of losses in an investee equals or exceeds its carrying amount of the investment in the investee, the Group does not recognize further losses, unless the Group has guaranteed the obligations of the investee or is otherwise committed to provide further financial support for the investee. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary.

An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than temporary. The Group estimated the fair value of investments in equity investees under discounted cash flow analysis which requires significant judgments, including the estimation of future cash flows, which is dependent on internal forecasts, the estimation of long term growth rate of a company’s business, the estimation of the useful life over which cash flows will occur, and the determination of the weighted average cost of capital. The Group did not record any impairment on its equity method investment during the years ended December 31, 2020, 2021 and 2022.

Equity securities without readily determinable fair value

The Group has elected to measure the investment in equity securities without readily determinable fair values at cost minus impairment, if any, adjusted up or down for observable price changes. Any adjustment to the carrying amount is recorded in other income (loss), net. At each reporting period end, the Group makes a qualitative assessment considering impairment indicators to evaluate whether any of these investments is impaired. If the assessment indicates that the fair value of an investment is less than the carrying value, the investment in equity securities will be written down to its fair value, with the difference between the fair value of the investment and its carrying amount as an impairment loss. No fair value adjustment was recognized for the investment for the year ended December 31, 2022.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition

The majority of the Group’s revenue comes from sales of LiDAR products and gas detection products. The Group recognizes revenue at a point in time when control of the products is transferred to the customers, generally occurs upon delivery according to the terms of the underlying contracts. Product sales to certain customers may require customer acceptance due to performance acceptance criteria that is considered more than a formality. For these product sales, revenue is recognized upon the expiration of the customer acceptance period. The Group’s standalone selling prices are based on the prices charged to customers for the single performance obligation which is transfer of control of products upon delivery to the customers or upon expiration of the customer acceptance period. The Group’s general terms and conditions for its contracts do not contain a right of return that allows the customer to return products and receive a credit, and therefore the Group does not estimate returns. Amounts billed to customers for shipping and handling are included in revenue. Taxes collected from customers and remitted to governmental authorities are excluded from revenue on the net basis of accounting. Accounts receivable are due under normal trade terms, typically within 30 to 90 days.

For engineering design, development and validation service projects, control of the goods and services may be transferred over time or at a point in time depending on the terms of the contract. Control of the goods and services is transferred over time since the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. The Group recognizes revenue over time using an input method based on contract cost incurred to date compared to total estimated contract cost (cost-to-cost) as the services are provided. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services.

The Group typically provides standard product warranties on LiDARs. For LiDARs used in autonomous mobility sector, such warranties last one year. For those used in advanced driver assistance system sector, such warranties cover five years or 100 thousand kilometres, whichever comes first. Standard warranties are considered to be assurance type warranties and are not accounted for as separate performance obligations. The Group accrues estimated future warranty costs and charges to cost of revenues in the period that the related revenue is recognized. These estimates are based on historical warranty experience and any known or expected changes in warranty exposure, such as trends of product reliability and costs of repairing and replacing defective products. The Group also started to provide extended warranties as a service for an additional term ranging one to two additional years since late 2020. For service type extended warranty contracts, the Group allocates revenue to this performance obligation on a relative standalone selling price basis and recognizes the revenue rateably over time during the effective period of the services. The Group recognized nil, RMB676 and RMB7,702 for extended warranty services, for the years ended December 31,2020, 2021 and 2022, respectively.

Changes in the Group’s accrued warranty liability was as follows:


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance as of the beginning of the year	7,457	10,042	13,932
Warranty provision	8,752	10,766	8,467
Consumption	(6,167)	(6,876)	(4,705)
Balance as of the end of the year	10,042	13,932	17,694

A contract asset is recorded when the Group has transferred products or services to the customer before payment is received or is due, and the Group’s right to consideration is conditional on future performance in the contract. The Group records a contract asset for unbilled receivables for certain customers where the control of the goods or services has been transferred. A contract liability exists when the Group has received consideration but has not transferred the related goods or services to the customer. The Group’s contract liabilities mainly consist of payments received from customers before they received the products.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cost of revenues

Cost of revenues includes the manufacturing cost of LiDAR sensors and gas detection products, which primarily consists of direct material costs, personnel-related costs, purchasing costs, depreciation, amortization and overhead associated with manufacturing operations, accrued warranty costs, shipping costs, licensing fees, and write-downs of excess inventories and obsolete inventories.

Research and development expenses

Research and development expenses consist primarily of personnel-related costs directly associated with research and development organization, with the remainder being prototype expenses, third-party engineering and contractor costs, an allocated portion of facility and IT costs and depreciation. The Group’s research and development costs are related to enhancing and developing additional functionality for its existing products and on new product development, including new releases and upgrades to LiDAR sensors. The Group expenses research and development costs as incurred.

Government grants

Government grants consist of cash subsidies received by the Group from PRC local governments. Grants received as incentives for conducting business in certain local districts with no performance obligation or other restriction as to the use are recognized when cash is received. Grants received with government specified performance obligations are recognized when all the obligations have been fulfilled. Government grants received related to the purchases of long-term assets are used to net the cost of the respective assets.

The grants related to unfulfilled obligations of RMB7,614, nil and nil were included in the other non-current liabilities as of December 31, 2020, 2021 and 2022, respectively. The Group recorded government grants RMB15,384, RMB27,446 and RMB10,825 in other operating income(loss), net for the years ended December 31, 2020, 2021 and 2022, respectively.

Loss per share

Basic loss per share is computed by dividing net loss attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The Group had share options, which could potentially dilute basic earnings per ordinary share in the future. To calculate the number of shares for diluted earnings per ordinary share, the effect of the share options is computed using the treasury stock method.

Share-based compensation

The Group grants share-based awards of the Company to eligible employees and accounts for these share-based awards in accordance with ASC 718, Compensation - Stock Compensation.

Share-based awards that are subject to both the service period and the occurrence of a Qualified IPO as performance condition are measured at the grant date fair value and share-based compensation expenses are recognized for the cumulatively vested amount upon the completion of the Qualified IPO first and then over the remaining requisite service period, net of actual forfeitures, if any.

Share-based awards that are subject to only the service period are measured at the grant date fair value and share-based compensation expenses are recognized on a straight-line basis over the requisite service period of the individual grants. The Group recognizes share-based compensation expenses based on the target number of Class B ordinary shares that may be earned pursuant to the award. Forfeitures are recognized as reductions to share-based compensation when they occur.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Share-based compensation - continued

The fair value of the share options granted to employees is determined with the assistance of an independent valuation specialist using widely accepted valuation techniques, including discounted cash flow analysis on the expected future free cash flows and binomial option pricing model.

The Group accounts for the effects of a modification as described in ASC 718. The Group calculates incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified. For vested options, the Group would recognize incremental compensation cost on the date of modification and for unvested options, the Group would recognize, prospectively and over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award.

Share-based compensation with cash settlement features are classified as liabilities. The percentage of the fair value that is recorded as compensation cost at the end of each period is based on the percentage of the requisite service that has been rendered at that date. Changes in fair value of the liability classified award that occurs during the requisite service period are recognized as compensation costs rateably over time during the services to be rendered.

Income Taxes

Current income taxes are provided for in accordance with the laws of the relevant tax authorities.

Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized. In making such a determination, the management consider all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. Deferred tax assets are then reduced by a valuation allowance through a charge to income tax expense when, in the opinion of management, it is more likely than not that a portion of or all of the deferred tax assets will not be realized.

The Group accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of the benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained (defined as a likelihood of more than fifty percent of being sustained upon an audit, based on the technical merits of the tax position), the tax position is then assessed to determine the amount of benefits to recognize in the combined and consolidated financial statements. The amount of the benefits that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2021 and 2022.

Leases

The Group leases office space, manufacturing plants and warehouses in Shanghai, PRC and California, USA under non-cancellable operating lease agreements that expire at various dates through October 31, 2025.

Before January 1, 2022, the Group used the Accounting Standards Codification, Leases (“ASC 840”), in which each lease is classified at the inception date as either a capital lease or an operating lease. All the Group’s leases are classified as operating lease under ASC 840. The Group’s reporting for periods prior to January 1, 2022 continued to be reported in accordance with Leases (ASC 840).

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Leases - continued

Effective from January 1, 2022, the Group adopted ASU No. 2016-02 “Leases” (“ASC 842”) using the modified retrospective approach. The Group elected the transition package of practical expedients permitted within the standard, which allowed it not to reassess initial direct costs, lease classification, or whether the contracts contain or are leases for any leases that existed prior to January 1, 2022. The Group also elected the short-term lease exemption for all contracts with an original lease term of 12 months or less. Upon the adoption, the Group recognized operating lease right-of-use (“ROU”) assets of RMB36,030 with corresponding lease liabilities of RMB36,599 on the combined and consolidated balance sheets. The operating lease ROU assets include adjustments for prepayments. The adoption did not impact the Group’s beginning retained earnings as of January 1, 2022, or the Group’s prior years’ financial statements.

The impact on the combined and consolidated balance sheets upon adoption of ASC842 was as follows:


	December 31, 2021	January 1, 2022
		Effect of the	After adoption
	As reported	adoption of ASC 842	of ASC 842
	RMB	RMB	RMB
ASSETS
Right-of-use assets	—	36,030	36,030
TOTAL ASSETS	—	36,030	36,030
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued expenses and other current liabilities	569	12,566	13,135
Lease liabilities, non-current	—	23,464	23,464
TOTAL LIABILITIES	569	36,030	36,599
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	569	36,030	36,599

Under ASC 842, the Group determines whether an arrangement constitutes a lease and records lease liabilities and ROU assets on its combined and consolidated balance sheets at the lease commencement date. The Group measures the operating lease liabilities at the commencement date based on the present value of remaining lease payments over the lease term, which is computed using the Group’s incremental borrowing rate, an estimated rate the Group would be required to pay for a collateralized borrowing equal to the total lease payments over the lease term. The Group measures the operating lease ROU assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing operating lease expense based on lease payments on a straight-line basis over the lease term after the lessor makes the underlying asset available to the Group. Some of the Group’s lease contracts include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Group does not include renewal option periods in the lease term for which it is not reasonably certain to exercise.

Comprehensive loss

Comprehensive loss is defined as the change in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss is reported in the consolidated statement of operations and comprehensive income. Accumulated other comprehensive loss, as presented on the accompanying combined and consolidated balance sheets consists of accumulated foreign currency translation adjustments.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Segment

The Chief Executive Officer, Chief Scientist and Chief Technology Officer (collectively referred to the “founders”) are identified as the chief operating decision maker (CODM).

The Group organized its operations into two segments: LiDAR segment and gas detection segment. The financial information of the respective segments are disclosed in Note 22.

Concentration of risks

Concentration of credit risk

Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, accounts receivable, contract assets, amount due from related parties, and prepayments and other current assets.

The Group places its cash and cash equivalents and short-term investments in various financial institutions in the PRC, Hong Kong Special Administrative Region, and the United States. The Group believes that no significant credit risk exists as all of the Group’s cash and cash equivalents are held with financial institutions that Group’s management believes to be high credit quality.

Accounts receivable, contract assets and amount due from related parties are typically unsecured and are derived from revenue earned from the customers. The Group conducts credit evaluations of customers to whom credit terms are extended. The Group establishes an allowance for doubtful accounts based on CECL model developed by the Group, which considers historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers.

Prepayments and other current assets mainly consists of deposits of rent, and prepaid expenses, which can be applied for deduction of future payments for expenses. The Group has no significant concentrations of credit risk with respect to its prepayments and other current assets.

Concentration of customers

The following customers accounted for 10% or more of revenue for the years ended December 31, 2020, 2021 and 2022:


	For the Year ended
	December 31,
	2020		2021		2022
Customer A	—	*	—	*	24.3	%
Customer B	10.4	%	17.5	%	13.7	%
Customer C	—	*	12.7	%	—	*
Customer D	11.6	%	—	*	—	*

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of customers - continued

The following customers accounted for 10% or more of the Group’s accounts receivable, contract assets and amount due from related parties as of December 31, 2021 and 2022:


	As of December 31,
	2021		2022
Customer A	—	*	61.0	%
Customer B	64.4	%	15.3	%

Concentration of suppliers

The Group has one supplier accounted for 10% or more of purchases for the years ended December 31, 2020, 2021 and 2022:


	For the Year Ended December 31,
	2020		2021		2022
Supplier A	11.5	%	13.7	%	12.3	%

Foreign currency risk

A significant portion of Group’s cash and cash equivalents and short-term investments are denominated in US$, fluctuations in exchange rates between US$ and RMB may result in foreign exchange gains or losses. The value of US$ is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group has cash and cash equivalents that are denominated in US$, totalling US$26,545 and US$51,351 as of December 31, 2021 and 2022, respectively.

Recent accounting pronouncements

Under the Jumpstart Our Business Startups Act of 2012, as amended (“the JOBS Act”), the Group meets the definition of an emerging growth company, or EGC as of December 31, 2022, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. Once the Group ceases to qualify as EGC, it will immediately adopt the new and revised accounting standards already effective for public companies. There are no recent accounting pronouncements which are expected to have a material effect on the Company’s consolidated financial statements in the current or any future periods.

Convenience translation

The Group’s business is primarily conducted in China and most of its revenues are denominated in RMB. However, periodic reports made to shareholders will include current period amounts translated into US$ using the then current exchange rates, for the convenience of the readers. Translations of balances in the combined and consolidated balance sheet, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2022 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.8972 representing the noon buying rate set forth in the H.10 statistical release of the United States as of December 30, 2022.

ACCOUNTS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2022

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

3.	ACCOUNTS RECEIVABLE, NET

Accounts receivable and expected credit losses as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Accounts receivable	93,115	491,293
Less: allowance for expected credit losses	(7,294)	(6,249)
Total accounts receivable, net	85,821	485,044

The roll-forward of the allowance for credit losses related to accounts receivable for the years ended December 31, 2021 and 2022 consists of the following activity:


	For the Year ended December 31,
	2021	2022
	RMB	RMB
Balance at beginning of year	5,270	7,294
Provision (reversal) for expected credit losses	2,024	(1,045)
Balance at end of year	7,294	6,249

INVENTORIES

12 Months Ended

Dec. 31, 2022

INVENTORIES

INVENTORIES

4.	INVENTORIES


	As of December 31,
	2021	2022
	RMB	RMB
Raw materials	123,940	290,121
Work-in-process	91,898	180,367
Finished goods	160,406	176,364
Inventories	376,244	646,852

Inventory write-off were RMB16,600 and RMB39,431, respectively, for the years ended December 31, 2021 and 2022.

PREPAYMENTS AND OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2022

PREPAYMENTS AND OTHER CURRENT ASSETS

PREPAYMENTS AND OTHER CURRENT ASSETS

5.PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments and other current assets, as of December 31, 2021 and 2022 were as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Advances to suppliers	53,666	82,419
Deposits	8,941	11,998
Prepaid expenses	9,123	10,108
Value-added tax recoverable	9,360	6,748
Others	8,029	15,179
Total	89,119	126,452

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2022

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

6.PROPERTY AND EQUIPMENT, NET

Property and equipment, as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Cost
Electronic equipment	46,856	79,663
Leasehold improvements	48,901	63,995
Machinery and equipment	12,622	121,614
Furniture and fixture	32,599	54,851
Transportation vehicles	2,003	4,411
Total cost	142,981	324,534
Less: Accumulated depreciation	(39,810)	(84,329)
Property and equipment, net	103,171	240,205
Construction in Progress	218,456	264,748
Total	321,627	504,953

Depreciation expenses were RMB21,187 and RMB44,856 for the years ended December 31, 2021 and 2022, respectively.

The construction in progress as of December 31, 2021 and 2022 mainly represents the Company’s new manufacturing facility in Shanghai, PRC, and is expected to commence manufacturing in 2023.

LONG-TERM INVESTMENTS

12 Months Ended

Dec. 31, 2022

LONG-TERM INVESTMENTS

LONG-TERM INVESTMENTS

7.	LONG-TERM INVESTMENTS


	As of December 31,
	2021	2022
	RMB	RMB
Investments in equity securities	—	30,000
Investments in equity method investee	1,902	1,856
Total	1,902	31,856

In July 2022, the Group purchased 1.2% equity interest of Vertilite Co., Ltd. (“Vertilite”) with total consideration RMB30,000 and recorded the investment in equity securities without readily determinable fair value. Vertilite is a company specializing in the development of high power and high speed vertical-cavity surface-emitting laser and module solutions.

INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2022

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS, NET

8.	INTANGIBLE ASSETS, NET

Intangible assets, as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Software	21,346	30,095
Technology	8,178	8,390
Total cost	29,524	38,485
Less: Accumulated amortization	(9,971)	(17,885)
Intangible assets, net	19,553	20,600

Amortization expenses related to intangible assets were RMB6,326 and RMB 7,914 for the years ended December 31, 2021 and 2022. The Group expects to record amortization expenses of RMB7,053, RMB4,237, RMB2,975, RMB2,425, and RMB3,910 for the years ending December 31, 2023, 2024, 2025, 2026, and 2027 and years after, respectively.

LAND-USE RIGHTS, NET

12 Months Ended

Dec. 31, 2022

LAND-USE RIGHTS, NET

LAND-USE RIGHTS, NET

9.	LAND-USE RIGHTS, NET

In March 2021, the Group acquired a land-use right at a total cost of RMB43,188 for approximately 26,615 square meters of land in Shanghai, the PRC for the construction of a new factory. According to the land-use rights policy in the PRC, the Group has a 50-year use right over the land. The Group recorded amortization expenses of nil, RMB718, and RMB864 for the years ended December 31, 2020, 2021 and 2022, respectively.

OTHER NON-CURRENT ASSETS

12 Months Ended

Dec. 31, 2022

OTHER NON-CURRENT ASSETS

OTHER NON-CURRENT ASSETS

10.	OTHER NON-CURRENT ASSETS

Other non-current assets as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Prepayments for purchase of property and equipment	55,207	46,083
Demonstration fleet	5,790	4,936
Long-term deposits	6,909	3,836
Others	2,053	2,243
Other non-current assets	69,959	57,098

Long-term deposits mainly consist of rental deposit for offices and production capacity which will not be collectible within one year.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2022

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

11.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities as of December 31, 2021 and 2022 are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Salaries and welfare payables	122,489	166,923
Payables for purchase of property and equipment	114,446	102,181
Accrued expenses	12,798	41,558
Current portion of operating lease liabilities	—	34,975
VAT and other tax payables	115,540	5,903
Advances from employee	5,581	4,962
Total	370,854	356,502

LEASES

12 Months Ended

Dec. 31, 2022

LEASES

LEASES

12.

LEASES

The Group has operating leases for offices and factories. The Group recognized ROU assets of RMB44,349 and corresponding current liabilities of RMB34,975 in accrued expenses and other current liabilities, and long-term operating lease liabilities of RMB10,139, as of December 31, 2022. The weighted average remaining lease term was approximately 1.86 years as of December 31, 2022, and the weighted average discount rate was 4.25% for the year ended December 31, 2022.

For the years ended December 31, 2020, 2021 and 2022, Operating lease expenses were RMB15,465, RMB21,792 and RMB34,596 (including RMB2,127 for short-term leases not capitalized as ROU assets), respectively. The maturities of lease liabilities in accordance with Leases (ASC 842) as of December 31, 2021 and December 31, 2022 were as follows:


		As of
		December 31, 2021
		RMB
2022		30,429
2023		26,071
2024		4,536
2025		3,096
Total lease payment		64,132


		As of
		December 31, 2022
		RMB
2023		36,025
2024		7,145
2025		3,282
Total lease payment		46,452
Less: imputed interest		(1,338)
Present value of minimum operating lease payments		45,114
Less: Current operating lease liabilities		(34,975)
Long-term operating lease liabilities		10,139

Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2022 were RMB28,163. Right-of-use assets obtained in exchange for the operating lease liabilities in non-cash transactions for the year ended December 31, 2022 were RMB37,414.

LONG-TERM BORROWINGS

12 Months Ended

Dec. 31, 2022

LONG-TERM BORROWINGS

LONG-TERM BORROWINGS

13.LONG-TERM BORROWINGS

In November 2022, the Group entered into a two-year facility of RMB700,000, with an annual interest rate of China’s one-year loan prime rate (“LPR”) minus 100 bps. The usage of credit facility is restricted to the purchasing of property and equipment for the production facility under construction in Jiading, Shanghai. The Group’s land-use rights, ongoing and completed constructions of the new manufacturing facility are pledged as collaterals for this credit facility. The facility will expire on December 4, 2024.

In December 2022, the Group withdrew RMB18,472 and the annual interest rate for the year ended December 31, 2022 was 2.65%. The interest is payable at the end of each quarter and recorded as accrued expenses and other current liabilities in the combined and consolidated balance sheets. The principal maturities of the long-term borrowings as of December 31, 2022 are as follows:


For the year ended December 31,		RMB
2025		5,542
2026		5,542
2027		7,388
Total		18,472

The Group has RMB681,528 unused bank facility in connection to borrowings for the purpose of purchasing property and equipment as of December 31, 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (d)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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+ Details

REDEEMABLE EQUITY

12 Months Ended

Dec. 31, 2022

REDEEMABLE EQUITY

REDEEMABLE EQUITY

14.	REDEEMABLE EQUITY

Since its establishment, Hesai Photonics has received several rounds of equity financing in the form of Series A+/B/B+/C-1/C-2/C-3 redeemable equity from external investors from March 2017 to July 2019. As of December 31, 2019, 40.8% of total equity interest of Hesai Photonics were redeemable equity.

The Group classifies the redeemable equity as mezzanine equity as the equity is redeemable upon the occurrence of an event not solely within the control of the Group.

The Group recognizes changes in the redemption value immediately as they occur and adjusts the carrying amount of the redeemable equity to equal the redemption value at the end of each reporting period as if it was the redemption date for the redeemable equity. The change in redemption value is recorded against retained earnings, or in the absence of retained earnings, by charging against additional paid-in capital. Once additional paid-in capital has been exhausted, additional charges are recorded by increasing the accumulated deficit.

On August 1, 2020, in conjunction with the conversion of Hesai Photonics into a joint stock company under the PRC law, Hesai Photonics changed its name to Shanghai Hesai, and issued 51,485,191 ordinary shares to its then existing equity interest holders at no consideration, all in the same proportions, on an as converted basis, as the percentage of equity interest they held in Hesai Photonics (the “2020 Reorganization”). In accordance with the relevant PRC rules and regulation, upon conversion into a joint stock company, Shanghai Hesai is required to transfer all of its accumulated profit/deficits to additional paid-in capital. Accordingly, Shanghai Hesai transferred its accumulated deficits of RMB221,929 to additional paid in capital.

In connection with the 2020 Reorganization, all the outstanding redeemable equity was converted into ordinary shares of Shanghai Hesai at no consideration, all in the same proportion as the percentage of equity interest they held in Hesai Photonics.

14.	REDEEMABLE EQUITY (continued)

The details of redeemable equity financing are set out as below:


		As		Proceeds			Upon
		percent of		from	December 31,	August 1,	Completion	December 31,
		equity at		Issuance, net	2019	2020	of the 2020	2020
	Issuance	issuance		of issuance	Carrying	Carrying	Reorganization	Carrying
Series	Date	date		cost	Amount	Amount	Amount	Amount
				RMB	RMB	RMB	RMB	RMB
Series A+	March 2017	10.9	%	75,750	93,773	93,773	(93,773)	—
Series B	November 2017	10.9	%	104,611	124,645	124,645	(124,645)	—
Series B+	June 2018	6.0	%	96,316	109,525	109,525	(109,525)	—
Series C-1	May 2019	7.8	%	261,635	273,503	273,503	(273,503)	—
Series C-2	June 2019	7.0	%	254,052	265,060	265,060	(265,060)	—
Series C-3	July 2019	5.8	%	224,054	232,133	232,133	(232,133)	—
Total				1,016,418	1,098,639	1,098,639	(1,098,639)	—

As all of redeemable equity interests were converted into ordinary shares of Shanghai Hesai in August 2020, no change in redemption value was recorded for the year ended December 31, 2020 as the management of the Group evaluated that redemption was not probable and therefore did not accrete the equity interest to the redemption value.

Key terms of the redeemable equity are as follows, which were expired upon the conversion to ordinary shares of Shanghai Hesai:

Voting

Before the 2020 Reorganization, directors exercised controls over Shanghai Hesai through resolution of board of directors. Redeemable equity holders were eligible to exercise influence over the management and operating policy through nomination, appointment and removal of directors.

Redemption

The holders of redeemable equity shall have the right to redeem if a Qualified-IPO has not been consummated by December 31, 2022.

The redemption price of the redeemable equity shall be the issue price plus a compound interest rate of 8% per annum for each year such redeemable equity was outstanding, calculated from the date of payment of consideration for subscription through the date of redemption thereof (and calculated on a pro rata basis in case of a partial year) plus all declared but unpaid dividends thereon up to the date of actual payment of such redemption price, proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations or mergers.

The redemption right is exercised in the sequence of Series C-1/C-2/C-3, Series B+, Series B, and Series A+ redeemable equity.

Dividend rights

The holders receive dividends on an as-if converted basis when dividends are declared.

14.	REDEEMABLE EQUITY (continued)

Liquidation

In the event of any liquidation, including deemed liquidation event (as described below), dissolution or winding up of Shanghai Hesai, either voluntary or involuntary, distributions shall be made in the following manner (after satisfaction of all creditors’ claims and claims that may be preferred by law):

(i)

The holders of Series A+/B/B+/C-1/C-2/C-3 redeemable equity shall be entitled to receive the amount equal to their respective issue prices, plus all declared but unpaid dividends on such equity. The liquidation preference is exercised in the sequence of Series C-1/C-2/C-3 redeemable equity, Series B+ redeemable equity, Series B redeemable equity, and Series A+ redeemable equity. If there are any assets or funds remaining after distribution in full to the holders of the equity, the remaining assets and funds of Shanghai Hesai that is legally available for distribution to the shareholders of Shanghai Hesai shall be distributed to the holders of the equity and ordinary shares ratably amongst them in proportion to the number of ordinary shares of Shanghai Hesai held by them on an as-converted basis.

(ii)

If after satisfaction of all creditors’ claims and claims that may be preferred by law, the distributable fund is larger than 140% of the issuance price plus any and all declared but unpaid dividends for all Series A+/B/B+/C-1/C-2/C-3 redeemable equity shareholder, the liquidation preference is no longer applicable.

A deemed liquidation event shall include i) a merger, amalgamation or consolidation of Shanghai Hesai; ii) a sale, exchange, transfer or other disposition of all or substantially all of the assets of Shanghai Hesai.

All these preferential rights are subject to termination without any additional consideration upon the legal form change of Shanghai Hesai to meet the relevant regulation requirements for a Qualified IPO.

REDEEMABLE SHARES

12 Months Ended

Dec. 31, 2022

REDEEMABLE SHARES

REDEEMABLE SHARES

15.	REDEEMABLE SHARES

In the second quarter of 2021, the Group signed agreements (the “Side Letters”) with its external shareholders holding 54,551,513 Class B ordinary shares, whereby the Group has agreed to provide an option for these shareholders to re-designate their ordinary shares to preferred shares in the event that the Company fails to complete an overseas IPO within twelve months following the dates of the agreements. Among all the preferred rights associated with the shares, the agreements provide the investors with the right to redeem if a Qualified-IPO has not been consummated by December 31, 2022. The redemption price of the redeemable shares shall be the issue price plus a compound interest rate of 8% per annum for each year such redeemable shares was outstanding, calculated from the date of payment of consideration for subscription through the date of redemption thereof (and calculated on a pro rata basis in case of a partial year) plus all declared but unpaid dividends thereon up to the date of actual payment of such redemption price, proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations or mergers. The redemption right is exercised in the sequence of Series D, Series C+, Series C-1/C-2/C-3, Series B+, Series B, and Series A+ redeemable shares. Upon the completion of the Qualified-IPO, all the preferred rights (including the redemption rights) associated with the shares shall terminate.

The Company has accounted for these agreements as material amendments such that extinguishment accounting is applied to these shares at the agreement dates. Given these shares are redeemable upon an event not solely within the control of the Company, the Company has reclassified the 54,551,513 Class B ordinary shares from permanent equity to mezzanine equity at their current fair values and the difference is recorded as deemed dividend. The fair value of these shares at the agreement dates were determined to be RMB3,056,417 by the Company with the assistance of a third party valuer. The excess of fair value of redeemable shares over the carrying amounts of ordinary shares is recognized as deemed dividend in the amount of RMB2,131,572, by charging against retained earnings, or in the absence of retained earnings, by charges against additional paid-in capital. Once additional paid-in-capital has been exhausted, additional charges are recorded by increasing the accumulated deficit.

15.REDEEMABLE SHARES (continued)

The details of redeemable shares are set out as below:


		Carrying value at	Change in	Carrying value at
	Number	the date of re-	carrying	December 31,
Series	of shares	classification	value	2021
		RMB	RMB	RMB
Series A+	3,029,522	284,480	—	284,480
Series B	7,881,155	742,091	—	742,091
Series B+	3,957,617	375,599	—	375,599
Series C-1	4,289,102	416,021	—	416,021
Series C-2	6,176,311	598,974	—	598,974
Series C-3	5,594,483	542,489	—	542,489
Series C+	956,657	96,763	—	96,763
Series D	22,666,666	2,404,316	79,758	2,484,074
Total	54,551,513	5,460,733	79,758	5,540,491


			Change in
	Number of	Carrying value at	carrying	Carrying value at
Series	shares	December 31, 2021	value	December 31, 2022
		RMB	RMB	RMB
Series A+	3,029,522	284,480	—	284,480
Series B	7,881,155	742,091	—	742,091
Series B+	3,957,617	375,599	—	375,599
Series C-1	4,289,102	416,021	—	416,021
Series C-2	6,176,311	598,974	—	598,974
Series C-3	5,594,483	542,489	—	542,489
Series C+	956,657	96,763	—	96,763
Series D	22,666,666	2,484,074	446,419	2,930,493
Total	54,551,513	5,540,491	446,419	5,986,910

Except for Series D shares, all of the other series shares have carrying value higher than their respective redemption value, as such, no accretion to redemption value is recorded. For Series D shares, the change in redemption value is RMB79,758 and RMB446,419, which are recorded as deemed dividends for the years ended December 31, 2021 and 2022 respectively. The redemption value of the redeemable shares as of December 31, 2022, which is the earliest redemption date of those redeemable shares, are listed as below:


		Redemption
		value as of
Series		December 31, 2022
		RMB
Series A+		53,514
Series B		157,050
Series B+		110,451
Series C-1		226,775
Series C-2		324,984
Series C-3		292,483
Series C+		83,599
Series D		2,930,544
Total		4,179,400

As of December 31, 2022, no shareholder has elected re-designate ordinary shares to preferred shares . Upon completion of the IPO in 2023, the preferred rights associated with the shares were terminated.

ORDINARY SHARES

12 Months Ended

Dec. 31, 2022

ORDINARY SHARES

ORDINARY SHARES

16.	ORDINARY SHARES

Holders of Class A ordinary shares and Class B ordinary shares of the Company have the same rights, except for voting rights. Holders of Class A ordinary shares are entitled to ten votes per share in all shareholders’ meetings, while holders of Class B ordinary shares are entitled to one vote per share.

In June and September 2021, the Company issued 18,424,242 Class B ordinary shares to Series D investors upon their conversion of the convertible loans. In September 2021, the Company issued 4,242,424 Class B ordinary shares to a Series D investor at a per share value of US$16.50 for a total cash consideration of US$70,000 (RMB 453,978). The Company received payment of the subscription on October 12, 2021.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

NET REVENUES

12 Months Ended

Dec. 31, 2022

NET REVENUES

NET REVENUES

17.	NET REVENUES

The following table presents the Group’s net revenues for the years ended December 31, 2020, 2021 and 2022.


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Product revenues
Revenue from LiDAR products	346,068	685,333	1,122,237
Revenue from gas detection products	68,599	19,533	23,967
Other revenues	847	1,200	5,663
Service revenues
Engineering design, development and validation service	—	14,026	43,101
Extended warranties	—	676	7,702
Total	415,514	720,768	1,202,670

The following table summarizes the Group’s revenues disaggregated by the different geographic location.


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Revenue by geographic location
Mainland China	185,516	269,634	697,294
North America	201,194	352,981	358,549
Europe	16,589	67,912	86,153
Other regions	12,215	30,241	60,674
Net revenues	415,514	720,768	1,202,670

17.NET REVENUES (continued)

The movements of the Group’s accounts receivable and contract balances are as follows:


	Accounts	Contract	Contract
	Receivable	assets	liabilities
	RMB	RMB	RMB
Opening Balance as of January 1, 2020	36,511	—	11,843
Increase(decrease), net	19,808	38,337	(2,486)
Opening Balance as of January 1, 2021	56,319	38,337	9,357
Increase, net	29,502	108,200	113,246
Ending Balance as of December 31, 2021	85,821	146,537	122,603
Increase(decrease), net	399,223	(133,937)	(82,225)
Ending Balance as of December 31, 2022	485,044	12,600	40,378

Revenues with amount of RMB11,843, RMB8,048, and RMB109,120 were recognized in the years ended December 31, 2020, 2021 and 2022, respectively, that were included in the balance of contract liabilities at the beginning of the each year.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
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-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 12
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2022

INCOME TAXES

INCOME TAXES

18.	INCOME TAXES

United States

The applicable income tax rate of United States where the Company’s subsidiaries having significant operations for the years ended December 31, 2021 and 2022 is 27.98%, which is a blended state and federal rate.

PRC

The PRC Enterprise Income Tax Law (“EIT Law”), which became effective on January 1, 2008, applies a uniform enterprise income tax (“EIT”) rate of 25% to both foreign-invested enterprises (“FIEs”) and domestic enterprises. Certified High and New Technology Enterprises (“HNTE”) are entitled to a favorable statutory tax rate of 15%, but need to re-apply every three years. During this three-year period, an HNTE must conduct a qualification self-review each year to ensure it meets the HNTE criteria and is eligible for the 15% preferential tax rate for that year. If an HNTE fails to meet the criteria for qualification as an HNTE in any year, the enterprise cannot enjoy the 15% preferential tax rate in that year, and must instead use the regular 25% EIT rate.

Shanghai Hesai applied for the HNTE qualification and received approval in December 2019, and such qualification was renewed in November 2022 for 2022 to 2024. Shanghai Hesai was entitled to continue to enjoy the beneficial tax rate of 15% as an HNTE for the years ended December 2020, 2021 and 2022.

According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC, enterprises engaging in R&D activities are entitled to claim 175% of their qualified research and development expenses so incurred as tax deductible expenses when determining their assessable profits for 2020 and 200% for 2021 and afterwards (“Super Deduction”) when enterprise engage in manufacturing business. The additional deduction of qualified research and development expenses can only be claimed directly in the annual EIT filing and subject to the approval from the relevant tax authorities.

Withholding tax on undistributed dividends

Under the EIT Law enacted by the National People’s Congress of the PRC, dividends generated after January 1, 2008 and payable by a foreign investment enterprise in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement.

18.INCOME TAXES (continued)

Withholding tax on undistributed dividends - continued

In accordance with accounting guidance, all undistributed earnings are presumed to be transferred to the parent company and are subject to the withholding taxes. All FIEs are subject to the withholding tax from January 1, 2008. The presumption may be overcome if the Group has sufficient evidence to demonstrate that the undistributed dividends will be re-invested and the remittance of the dividends will be postponed indefinitely. The Group did not record any dividend withholding tax, as it has no retained earnings for any of the years presented.

The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC will be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, there is uncertainty as to the application of the EIT Law. Should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC income tax on worldwide income at a uniform tax rate of 25%. The Company is not subject to any other uncertain tax position.

The current and deferred portion of income tax expenses included in the combined and consolidated statements of operations and comprehensive loss are as follows:


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Current tax expenses	—	—	2
Over-provision in prior year	(125)	(1,057)	—
Deferred tax benefits	(74)	(58)	(68)
Income tax (benefits) expenses	(199)	(1,115)	(66)

Net Loss before income tax by tax jurisdiction:


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net loss before income tax from PRC operations	(104,524)	(92,498)	(251,302)
Net loss before income tax from non-PRC operations	(2,891)	(153,444)	(49,529)
Total net loss before income tax	(107,415)	(245,942)	(300,831)

A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows:


	For the Year ended December 31,
	2020		2021		2022
Statutory income tax rate	25.00	%	25.00	%	25.00	%
Effect of different tax rate of different jurisdictions	0.10	%	(4.39)	%	(3.09)	%
Non-deductible expenses	(0.30)	%	(17.98)	%	(6.12)	%
Effect of super deduction on R&D expenses	38.83	%	34.83	%	41.00	%
Effect of change of valuation allowance	(63.56)	%	(37.44)	%	(56.77)	%
Over provision for prior years	0.12	%	0.43	%	—
Income tax expenses	0.19	%	0.45	%	0.02	%

18.INCOME TAXES (continued)

Deferred tax assets and deferred tax liabilities


	As of December 31,
	2021	2022
	RMB	RMB
Deferred tax assets
– Net operating loss carry forwards	220,480	373,215
– Deductible temporary differences	11,562	31,348
– Deferred revenue	9,443	6,294
Less: valuation allowance	(241,485)	(410,857)
Net deferred tax assets	—	—
Deferred tax liabilities
– Identifiable intangible assets from business combination.	466	439
Total deferred tax liabilities	466	439

Movement of valuation allowance

Movement of valuation allowance is as follow:


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance at beginning of the year	67,985	136,269	241,485
Addition	68,284	105,216	169,372
Total	136,269	241,485	410,857

For the years ended December 31, 2020, 2021 and 2022, the Group had net operating loss carry forwards of approximately RMB476,996, RMB881,256,and RMB1,492,808 respectively, which arose from the subsidiaries established in the PRC and United States. The loss carry forwards will expire during the period from 2024 to 2032, while the federal loss carry forwards for US entities do not expire and can be carried forward indefinitely. The Group had provided a full valuation allowance for the deferred tax assets as of December 31, 2021, and 2022, as management determined that deferred tax assets were not more likely than not to be realizable in future tax years based on all available evidence.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

19.	SHARE-BASED COMPENSATION

2020 Option Incentive Plan (“the 2020 Plan”)

The Group implemented a share option incentive plan in October 2020 to grant share options to eligible middle management and other key employees (the “incentive recipients”). The total number of option that could be grant under the 2020 Plan is 5,054,138 and upon conversion, new issuance of Class B ordinary shares would be issued to the holders. The contractual term is 5 years.

As of December 31, 2020, 5,054,138 share options of Shanghai Hesai were granted to employees with exercise price of RMB3.25 per share.

One-third of the award will be vested at the latter of the first anniversary of the Commencement Date or the Group’s completion of IPO (“First Vesting Date”). The remaining two-thirds shall be vested at each of the 12 months from the First Vesting Date, respectively. The actual number of the shares could be exercised is also subjected to adjustment based on employee performance evaluation result. The Group considers the IPO being a substantive performance condition and as a result, the Group has not recognized any share-based compensation expenses related to the options granted.

19.SHARE-BASED COMPENSATION (continued)

2021 Share Incentive Plan (the “2021 Plan”)

In June 2021, the Board of Directors of the Company approved the 2021 Share Incentive Plan, which authorized the issuance of all awards to purchase up to 16,365,047 ordinary shares to the Group’s employees, directors, and consultants, as determined by the Board of Directors of the Company. The 2021 Plan replaced all share incentive plans or similar arrangements previously adopted by the Group.

Replacement of the 2017 Option Incentive Plan (the “2017 Plan”) and the 2020 Plan

Under the 2017 Plan, among 14,710,802 restricted shares of Shanghai Hesai outstanding at January 1, 2021, 136,269 shares were repurchased by Shanghai Hesai due to termination of employment of award recipients during 2021 under the 2017 plan. As part of the 2021 Reorganization, the Company replaced 14,574,533 outstanding restricted shares of Shanghai Hesai with options to purchase 4,048,536 ordinary shares of the Company under the 2021 plan at a ratio of 3.6 to 1 (the “2017 Replacement”), which is at the same percentage of equity interest held by the award recipients on a fully diluted basis. These options are vested immediately; and consistent with the 2017 Plan, the options granted have the following vesting terms as implicit service condition:

●

The Company has the right to repurchase all ordinary shares obtained from exercise of the vested options by these award recipients if they terminate their employments within 5 years of employment, at the exercise price paid by the award recipients.

●

The Company has the right to repurchase all ordinary shares obtained from exercise of the vested options by these award recipients if they terminate their employment after 5 years of service and prior to a qualified IPO, at a price of exercise price plus a return based on a fixed annual rate of 8%.

At the modification date, the Company used the binomial option pricing model and income approach in determining the fair value of the awards granted. The 2017 Replacement did not change the classification and vesting condition of the share-based awards. Immediately before and after the modification, the fair value is the same with no incremental fair value recognized. Therefore, the replacement awards did not has accounting consequence and are accounted for in the same way as its original awards.

Under the 2020 Plan, among 5,054,138 options to purchase ordinary shares of Shanghai Hesai outstanding at January 1, 2021, 118,079 options were forfeited due to the termination of employment of the award recipients during 2021 under the 2020 plan. As part of the 2021 Reorganization, the Company replaced 4,936,059 options of Shanghai Hesai with 1,371,141 options of the Company under the 2021 plan at a ratio of 3.6 to 1 (the “2020 Replacement”), which is at the same percentage of equity interest held by the award recipients on a fully diluted basis. These options granted under the 2021 plan have the same terms and conditions under the 2020 Plan.

In December 2021, 312,051 unvested share options were cancelled without a concurrent grant of a replacement award. Since the unvested share options were not probable of vesting on the cancellation date as these options contain an IPO performance condition, the Group did not recognize any compensation cost upon cancellation.

Option awards to new incentive recipients during the years ended December 31, 2021 and 2022 (the “New Grant”)

On July 19, September 13, and November 22, 2021, under the 2021 Plan, the Company granted a total of 4,286,828 share options to a senior executive and employees, the vesting schedule of the awards include:

19.SHARE-BASED COMPENSATION (continued)

Option awards to new incentive recipients during the years ended December 31, 2021 and 2022 (the “New Grant”) - continued

2,000,000 share options, subject to a four-year vesting schedule and vest quarterly from the vesting commencement date at the rate of 125,000 shares per quarter. The grantee may early exercise and accelerate up to 500,000 shares by notifying the Company and paying the exercise price. Should the grantee voluntarily terminate his employment prior to the end of the vesting schedule, then the grantee will return the excess of any accelerated shares that would not have vested at the time of termination under the original vesting schedule.

Thirty-three percent (33%), thirty-three percent (33%) and thirty-four percent (34%) of 26,743 share options to be vested on the first, second and third anniversary of the vesting commencement date.

Twenty-five percent (25%) of 2,248,185 share options to be vested on each of the first, second, third and fourth anniversaries of the vesting commencement date.

Thirty-three percent (33%), thirty-three percent (33%) and thirty-four percent (34%) of 11,900 share options shall vest on the first, second and third anniversary of the initial public offering of the Company, respectively, subject to performance-based conditions.

On February 24, May 9, September 8, and December 24, 2022 under the 2021 Plan, the Company granted a total of 1,158,201 share options to employees, the vesting schedule of the awards include:

Thirty-three percent (33%), thirty-three percent (33%) and thirty-four percent (34%) of 115,806 share options to be vested on the first, second and third anniversary of the vesting commencement date.

Twenty-five percent (25%) of 1,007,458 share options to be vested on each of the first, second, third and fourth anniversaries of the vesting commencement date.

Thirty-three percent (33%), thirty-three percent (33%) and thirty-four percent (34%) of 12,300 share options shall vest on the first, second and third anniversary of the initial public offering of the Company, respectively, subject to performance-based conditions.

A hundred percent (100%) of the 1,189 options to be vested upon the Group’s completion of IPO.

Twenty-five percent (25%) of 21,448 share options to be vested on each of the first, second, third and fourth anniversaries of the vesting commencement date, subject to performance-based condition.

Additionally, in May 2022, the Company granted an employee with a share option award of 60,000 shares with a per share exercise price of US$18.65, which is based on the fair value of the ordinary share at the date of the grant. The options will vest rateably over a four year period with 25% vested every year. The option agreement includes a provision whereby the grantee can choose to receive cash payment at US$8 per share for any options that are vested but not exercised if his employment upon termination of employment when such grantee continuously work for the Group for four years. Exercise of share options cancels the cash award, and the cash redemption cancels all the vested share options. The Company considered this award as a combination grant of a cash settlement component with compensation cost measured based on the combined value.

19.SHARE-BASED COMPENSATION (continued)

Option awards to new incentive recipients during the years ended December 31, 2021 and 2022 (the “New Grant”) - continued

The binomial option pricing model was applied in determining the estimated fair value of the options granted. The model requires the input of subjective assumptions. The following table presents the assumptions used to estimate the fair values of the share options granted for the years ended December 31, 2021 and 2022:


	For the year ended
	December 31, 2021		December 31, 2022
Expected volatility	48.00% – 74.00	%	74.00% – 80.00	%
Risk-free interest rate (per annum)	0.97% – 1.55	%	1.94% – 3.83	%
Expected dividend yield	0.00	%	0.00	%
Employee forfeiture rate (per annum)	3.80	%	3.80% – 3.92	%
Exercise multiples	2.50		2.50
Expected term	7.00		7.00
Fair value of underlying ordinary share (per share)	US$14.10 – 18.42		US$18.11 – 19.91
Fair value of awards on valuation date	US$5.84 – 16.90		US$12.93 – 17.11

1)Expected volatility

Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies for the period before valuation date and with similar span as Time to Expiration.

2)Risk-free interest rate

Risk-free interest rate was estimated based on yield curve of US Government Bond for similar span as the expected term.

3)Expected dividend yield

The dividend yield was estimated as zero based on the plan to retain profit for corporate expansion and no dividend will be distributed in the near future.

4)Employee forfeiture rate (per annum):

Employee forfeiture rate was estimated by the management using employee resignation statistics.

5)Exercise multiple

Assumption on exercise multiple is made with reference to academic research.

6)Expected term:

The expected term was the life of options extracted from option agreements.

7)Fair value of underlying ordinary share (per share)

The fair value of underlying ordinary share was based on estimated equity value and allocation of it to each element of its capital structure. The equity value considers the valuations of recent Series D financing, or is based on discounted cash flow method which converts future amounts to a single present value amount and requires significant judgments on the expected future free cash flows and other assumptions including appropriate discount rate and estimation of long term growth rate of the Group’s business.

19.SHARE-BASED COMPENSATION (continued)

Option awards to new incentive recipients during the years ended December 31, 2021 and 2022 (the “New Grant”) - continued

The following table summarizes the activities of the Groups share options classified as equity for the years ended December 31, 2021 and 2022:


				Weighted
		Weighted	Weighted	average
	Number	average	average	remaining	Aggregate
	of	exercise	grant date	contract	intrinsic
	options	price	fair value	life	value
		RMB	RMB	Years	RMB
Outstanding at January 1, 2021	—	—	—	—	—
Granted (the 2017 Replacement and the 2020 Replacement)	5,419,677	3.87	22.83
Granted (the New Grant)	4,286,828	15.25	102.74
Forfeited	220,831	5.96
Cancelled	312,051	0.90
Exercised	—	—
Outstanding at January 1, 2022	9,173,623	9.23	56.58	6.32	1,005,546
Granted (the New Grant)	1,158,201	33.92	121.62
Forfeited	723,190	13.85
Exercised	—	—
Outstanding at December 31, 2022	9,608,634	12.51	65.93	5.46	1,141,255
Vested and expected to vest as of December 31, 2022.	5,088,920	19.66	101.08	5.88	568,013
Exercisable as of December 31, 2022	1,794,795	12.51	65.93	5.46	213,122

The weighted-average grant-date fair value of options granted during the years 2020, 2021, and 2022 was RMB62.21, RMB102.74, and RMB121.62, respectively. No option was exercised during the years ended December 31, 2020, 2021, and 2022.

The Group didn’t record any compensation expenses relating to options awarded with IPO condition for the years ended December 31, 2020, 2021 and 2022. Given the vesting of these options is contingent on a Qualified IPO, the share-based compensation expense related to the vested portion of these options would be recognized when Qualified IPO is probable. As of December 31, 2022, the total unrecognized share based compensation expenses relating to these options was RMB103,318, which is expected to be recognize over 2.1 years.

For the years ended December 31, 2021 and 2022, the total share-based compensation expenses related to share options without IPO condition was RMB54,283 and RMB104,750, respectively. As of December 31, 2022, the total unrecognized share-based compensation related to such option was RMB324,359, and is expected to be recognized over the estimated lives of 2.63 years.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

20.	RELATED PARTY TRANSACTIONS

Major related parties that transacted with the Group and their respective relationship to the Group listed as below:


Name of the related parties		Relationship
Mr. Kai Sun		Founding Shareholders
Mr. Yifan Li		Founding Shareholders
Mr. Shaoqing Xiang		Founding Shareholders
Mr. Minglie Hu		Shareholder
Mr. Min Ai		Shareholder
Shanghai Kunjie Phototonics Technology Co., Ltd.		An equity method investee of the Group
Shanghai Leyi Technology L.P.		An affiliate of the shareholder of the Group
Robert Bosch Kft.		An affiliate of the shareholder of the Group
Robert Bosch Ltd.		An affiliate of the shareholder of the Group
Robert Bosch France		An affiliate of the shareholder of the Group
Bosch Automotive Products (Suzhou) Co., Ltd.		An affiliate of the shareholder of the Group
Baidu USA LLC (Note)		An affiliate of the shareholder of the Group
Beijing Baidu Netcom Technology Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd.		An affiliate of the shareholder of the Group
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd.		An affiliate of the shareholder of the Group
Luobo Yunli (Beijing) Technology Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Dalian) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Technology (Beijing) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Connection (Beijing) Co., Ltd.		An affiliate of the shareholder of the Group

Note: Started from June 30, 2021, Baidu (China) Co., Ltd and its affiliates (collectively as “Baidu”) was no longer treated as the Group’s related parties as Baidu no longer has significant influence over the Group after the consummation of 2021 Reorganization.

For the years ended December 31, 2020, 2021 and 2022, significant related party transactions were as follows:


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net revenues
Affiliates of the shareholders of the Group	41,765	15,655	—
Total	41,765	15,655	—


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Research and development expenses
An equity method investee of the Group	900	—	—
Total	900	—	—

20.	RELATED PARTY TRANSACTIONS (continued)


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Purchases
An equity method investee of the Group	83	—	—
Total	83	—	—

The balances due from related parties of operations are as follows:


	As of December 31,
	2020	2021	2022
	RMB	RMB	RMB
Amounts due from related parties, net of allowance
Affiliates of the shareholder of the Group	28,088	—	—
An equity method investee of the Group	—	—	—
Total	28,088	—	—

The balances due to related parties of financing are as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Amounts due to related parties
Founding Shareholders and certain shareholders (Note)	307,498	334,283
Total	307,498	334,283

Note: In May 2021, as an integrated step of the 2021 Reorganization, in order to comply with certain PRC foreign currency control rules and regulations, the Founding Shareholders and certain investors are in the process of applying for permissions to pay the subscription consideration to the Company. Once they obtained the approval to pay the subscription receivables at Cayman Company level, the Group will then settle the consideration payable for the acquisition of their equity interests in Shanghai Hesai to facilitate their payment of the subscription receivable for the ordinary shares of the Company as part of the reorganization.

LOSS PER SHARE

12 Months Ended

Dec. 31, 2022

LOSS PER SHARE

LOSS PER SHARE

21.	LOSS PER SHARE

For the purpose of calculating net loss per share, the number of shares used in the calculation reflects the outstanding shares of the Company as if the 2021 Reorganization as described in Note 1 took place at the earliest period presented.


	For the year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Numerator
Net loss	(107,216)	(244,827)	(300,765)
Deemed dividend	—	(2,211,330)	(446,419)
Net loss attributable to ordinary shareholders	(107,216)	(2,456,157)	(747,184)
Denominator
Weighted average number of ordinary shares outstanding-basic and diluted	89,895,471	104,987,478	115,534,593
Basic and diluted net loss per share attributable to ordinary shareholders	(1.19)	(23.39)	(6.47)

21.	LOSS PER SHARE (continued)

For the years ended December 31, 2020, 2021 and 2022, the following share options were excluded from the calculation of diluted net loss per ordinary share, as their inclusion would have been anti-dilutive for the period prescribed.


	For the year ended December 31,
	2020	2021	2022
	Number	Number	Number
Shares issuable upon exercise of share options	5,490,261	9,173,623	9,608,634

SEGMENT

12 Months Ended

Dec. 31, 2022

SEGMENT

SEGMENT

22.

SEGMENT

The Group organized its operations into two segments: LiDAR segment and gas detection segment.

The table below provides a summary of the Group’s operating segment results for the years ended December 31, 2020, 2021 and 2022.


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
LiDAR segment
LiDAR product revenues	346,915	701,235	1,178,703
Cost of revenues	155,986	330,769	720,300
Segment profit	190,929	370,466	458,403
Gas detection segment
Gas detection product revenues	68,599	19,533	23,967
Cost of products sold	20,614	8,203	10,383
Segment profit	47,985	11,330	13,584
Total segment profit	238,914	381,796	471,987

The following is a reconciliation of the reportable segments’ measures of profit or loss to the Group’s consolidated loss before income taxes:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Total profit for reportable segments	238,914	381,796	471,987
Unallocated amounts*
Sales and marketing expenses	(49,904)	(69,266)	(104,835)
General and administrative expenses	(76,553)	(236,713)	(201,007)
Research and development expenses	(229,653)	(368,435)	(555,179)
Other operating income, net	15,384	27,333	10,817
Interest income	20,925	32,584	58,734
Foreign exchange (loss) gains	(25,696)	(13,275)	20,858
Other (loss) income, net	(828)	118	(2,161)
Loss before income tax	(107,411)	(245,858)	(300,786)

*The Group does not distinguish expenses between segments in its internal reporting, and reports expenses by nature as a whole.

22.	SEGMENT (continued)

The following table summarizes the Group’s long-term assets, including property and equipment, net, land-use rights, net, long-term investments, right-of-use assets, net and other non-current asset by geographical region:


	Year ended December 31,
	2021	2022
	RMB	RMB
Mainland China	432,528	665,511
North America	3,430	14,351
Total Long-term assets	435,958	679,862

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

EMPLOYEE BENEFIT

12 Months Ended

Dec. 31, 2022

EMPLOYEE BENEFIT

EMPLOYEE BENEFIT

23.	EMPLOYEE BENEFIT

Mainland China Contribution Plan

Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require that the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits were RMB15,732, RMB50,648 and RMB82,877 for the years ended December 31, 2020, 2021 and 2022, respectively. The Group has no ongoing obligation to its employees subsequent to its contributions to the PRC plan.

STATUTORY RESERVES AND RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2022

STATUTORY RESERVES AND RESTRICTED NET ASSETS

STATUTORY RESERVES AND RESTRICTED NET ASSETS

24.STATUTORY RESERVES AND RESTRICTED NET ASSETS

The Group’s entities in the PRC are required under PRC laws to distribute its after-tax profits of the current year and set aside at least 10% of its after-tax profits each year, if any to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital. The statutory reserve funds are not distributable as cash dividends. The Group has no statutory reserve balance for the years ended December 31, 2021 and 2022.

The PRC entities with the Group are restricted from transferring their net assets to the Company, which include paid-in capital and statutory reserves. As of December 31, 2022, the balance of restricted net assets was RMB3,334,624.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

25.	COMMITMENTS AND CONTINGENCIES

Capital expenditure commitments related to the new manufacturing facility in Shanghai

Future minimum capital payment under non-cancellable agreements are as follow:


		As of December 31,
		2022
		RMB
2023		314,793
2024		11,675
Total		326,468

Royalty fee commitments

The Group is obligated to make royalty payments to a third party from 2020 through 2030. The royalty payments for 2021 and 2022 should be US$3.0 million. For each year starting from 2023, the royalty payment is determined to be the greater amount of a base payment of US$3.0 million (except for the year of 2030, where the base payment shall be US$0.3 million) or amount calculated based on a tiered percentage of net revenues. In particular, the percentage should be 4%, 3% and 2% for the net revenues of rotational scanning product from US$0 to US$425,000, from US$425,000 to US$2,925,000, and from US$2,925,000 to above, respectively. Net sales does not include (a) taxes, tariffs, customs duties, excise, or other governmental charges (except income tax) levied and that are separately stated in an invoice, (b) reasonable charges for freight or insurance that are separately stated in an invoice and borne by the Group or its affiliates.

Contingencies

The Group may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. As of December 31, 2021 and 2022, there were no legal or administrative proceedings for which a loss was probable and expected to be material to the financial statements. Additionally, there were no legal or administrative proceedings for which a reasonably possible loss would be material to the financial statements.

Standby credit facility

In November 2022, the Company entered into a one-year credit facility agreement of RMB300,000 with a commercial bank in China. The interest rate is determined with each drawdown and subject to additional approval. As of December 31, 2022, the Group did not draw down any amount under this credit facility.

SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2022

SUBSEQUENT EVENT

SUBSEQUENT EVENT

26. SUBSEQUENT EVENT

On April 7, 2023, the Company and certain of its officers, directors, authorized U.S. representative, and IPO underwriters were named as defendants in a putative securities class action filed with federal court, alleging that the Company made false andmisleading statements in its initial public offering registration statement.

On April 11, 2023, Ouster Inc. filed a complaint against the Company with the United States District Court for the District of Delaware and the U.S. International Trade Commission for alleged patent infringement relating to the production, use, sale and/or importation of certain LiDAR systems and/or components thereof.

As these matters are in their preliminary stage, the Company cannot reasonably determine the outcome of these ligations and regulatory proceeding and potential loss, if any.

ADDITIONAL INFORMATION OF THE PARENT COMPANY

12 Months Ended

Dec. 31, 2022

ADDITIONAL INFORMATION OF THE PARENT COMPANY

ADDITIONAL INFORMATION OF THE PARENT COMPANY

FINANCIAL STATEMENTS SCHEDULE I

HESAI GROUP

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2021 and 2022

(Amounts in thousands, except share and per share data and otherwise noted)


	As of December 31,
	2021	2022
	RMB	RMB	US$
			(Note 2)
ASSETS
Cash and cash equivalents	36,160	35,411	5,134
Prepayments and other current assets	496	1,041	151
Investments in subsidiaries	3,037,606	2,806,201	406,860
Property and equipment, net	—	7	1
TOTAL ASSETS	3,074,262	2,842,660	412,146
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Amounts due to subsidiaries	272	—	—
Accrued expenses and other current liabilities	24,169	927	134
TOTAL LIABILITIES	24,441	927	134
MEZZANINE EQUITY
Redeemable shares (US$0.0001 par value, 54,551,513 shares issued and outstanding as of December 31, 2021 and 2022)	5,540,491	5,986,910	868,020
TOTAL MEZZANINE EQUITY	5,540,491	5,986,910	868,020
Shareholders’ Deficit
Class A Ordinary shares (US$0.0001 par value 35,000,000 shares authorized, 30,033,379 shares issued and outstanding as of December 31, 2021 and 2022)	19	19	3
Class B Ordinary shares (US$0.0001 par value 150,000,000 shares authorized, 30,949,701 shares issued and outstanding as of December 31, 2021 and 2022)	20	20	3
Subscription receivables	(310,227)	(310,227)	(44,979)
Accumulated other comprehensive income (loss)	8,465	(3,608)	(523)
Accumulated deficit	(2,188,947)	(2,831,381)	(410,512)
Total shareholders’ deficit	(2,490,670)	(3,145,177)	(456,008)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT	3,074,262	2,842,660	412,146

ADDITIONAL INFORMATION OF THE PARENT COMPANY

FINANCIAL STATEMENTS SCHEDULE I

HESAI GROUP

CONDENSED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022

(Amounts in thousands, except share and per share data and otherwise noted)


	For the years ended December 31,
	2020	2021	2022
	RMB	RMB	RMB	US$
				(Note 2)
Net revenues	—	—	—	—
General and administrative expenses	—	(146,838)	(37,105)	(5,379)
Foreign exchange (loss) gain	—	(2,324)	2	—
Other income, net	—	34	—	—
Equity in deficit of subsidiaries	(107,216)	(95,699)	(263,662)	(38,227)
Net Loss	(107,216)	(244,827)	(300,765)	(43,606)
Deemed dividend	—	(2,211,330)	(446,419)	(64,725)
Net loss attributable to ordinary shareholders of the Company	(107,216)	(2,456,157)	(747,184)	(108,331)
Net Loss	(107,216)	(244,827)	(300,765)	(43,606)
Comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(1,950)	9,083	(12,073)	(1,750)
Comprehensive loss	(109,166)	(235,744)	(312,838)	(45,356)

ADDITIONAL INFORMATION OF THE PARENT COMPANY

FINANCIAL STATEMENTS SCHEDULE I

HESAI GROUP

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020, 2021 and 2022

(Amounts in thousands, except share and per share data and otherwise noted)


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB	US$
				(Note 2)
Cash flows from operating activities:
Net loss	(107,216)	(244,827)	(300,765)	(43,606)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	—	—	2	—
Loss from equity in earnings of subsidiaries	107,216	95,699	263,662	38,227
Share-based compensation	—	35,056	33,342	4,834
Foreign exchange loss (gain), net	—	2,324	(2)	—
Changes in operating assets and liabilities:
Prepayments and other current assets	—	(496)	(545)	(79)
Amounts due from related parties	—	(255)	—	—
Accrued expenses and other current liabilities	—	24,746	2,611	379
Net cash used in operating activities	—	(87,753)	(1,695)	(245)
Cash flows from investing activities:
Purchases of property and equipment	—	—	(10)	(2)
Investments in subsidiaries	—	(2,787,570)	—	—
Net cash used in investing activities	—	(2,787,570)	(10)	(2)
Cash flows from financing activities:
Cash contribution from shareholders in connection with the 2021 Reorganization	—	507,620	—	—
Proceeds from issuance of convertible loans	—	1,950,338	—	—
Proceeds from issuance of ordinary shares	—	453,978	—	—
Net cash provided by financing activities	—	2,911,936	—	—
Net increase (decrease) in cash and cash equivalents	—	36,613	(1,705)	(247)
Cash and cash equivalents, beginning of the year	—	—	36,160	5,243
Effect of foreign exchange rate changes on cash and cash equivalents	—	(453)	956	138
Cash and cash equivalents, end of the year	—	36,160	35,411	5,134
Supplemental disclosure of non-cash financing activities:
Accrued purchases of property and equipment	—	1,950,338	—	—
Accrued offering cost	—	—	480	70

ADDITIONAL FINANCIAL INFORMATION OF PARENT COMPANY

FINANCIAL STATEMENTS SCHEDULE I

HESAI GROUP

FINANCIAL INFORMATION OF PARENT COMPANY

NOTES TO SCHEDULE I

1.Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same date and for the same period for which audited financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company does not include condensed financial information as to the changes in deficit as such financial information is the same as the consolidated statements of changes in shareholders’ deficit.

2.The condensed financial information has been prepared using the same accounting policies as set out in the financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, the Company records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments - Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheet as “Investment in and amount due from subsidiaries” and the subsidiaries’ profit or loss as “Loss from equity in earnings of subsidiaries” on the Condensed Statements of Comprehensive Income (loss). Ordinarily under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses.

3.As of December 31, 2021 and 2022, there were no material contingencies, significant provisions of long-term obligations, guarantees of the Company.

4.Translations of balances in the additional financial information of Parent Company - Financial Statements Schedule I from RMB into US$ as of and for the year ended December 31, 2022 are solely for the convenience of the readers and were calculated at the rate of US$1.00= RMB6.8972, as set forth in H.10 statistical release of the Federal Reserve Board on December 30, 2022. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into United States dollars at that rate on December 31, 2022, or at any other rate.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The combined and consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of Consolidation

Use of estimates

Fair value measurements

Level 1 Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurements – continued

Functional currency and foreign currency translation

Cash and cash equivalents

The Group classifies cash on hand and cash in bank with original maturities of three months or less, and are unrestricted as to withdrawal or use, as cash and cash equivalents.

Accounts receivable, net

Inventories

Property and equipment, net

Electronic equipment		3 – 5 years
Machinery and equipment		10 years
Furniture and fixture		5 years
Transportation vehicles		4 years
Leasehold improvements		Over the shorter of the expected lease term or useful lives

Intangible assets, net

Software		3 – 10 years
Technology		3 – 5 years

Land-use rights, net

Goodwill

No goodwill impairment was recorded for the years ended December 31, 2020, 2021 and 2022.

Long-term investments

Long-term investments

Investment in equity method investee

Equity securities without readily determinable fair value

Revenue recognition

Changes in the Group’s accrued warranty liability was as follows:


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance as of the beginning of the year	7,457	10,042	13,932
Warranty provision	8,752	10,766	8,467
Consumption	(6,167)	(6,876)	(4,705)
Balance as of the end of the year	10,042	13,932	17,694

Cost of revenues

Research and development expenses

Government grants

Loss per share

Basic loss per share is computed by dividing net loss attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year.

Share-based compensation

The Group grants share-based awards of the Company to eligible employees and accounts for these share-based awards in accordance with ASC 718, Compensation - Stock Compensation.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Share-based compensation - continued

Income Taxes

Current income taxes are provided for in accordance with the laws of the relevant tax authorities.

Leases

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Leases - continued

The impact on the combined and consolidated balance sheets upon adoption of ASC842 was as follows:


	December 31, 2021	January 1, 2022
		Effect of the	After adoption
	As reported	adoption of ASC 842	of ASC 842
	RMB	RMB	RMB
ASSETS
Right-of-use assets	—	36,030	36,030
TOTAL ASSETS	—	36,030	36,030
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued expenses and other current liabilities	569	12,566	13,135
Lease liabilities, non-current	—	23,464	23,464
TOTAL LIABILITIES	569	36,030	36,599
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	569	36,030	36,599

Comprehensive loss

Segment

The Chief Executive Officer, Chief Scientist and Chief Technology Officer (collectively referred to the “founders”) are identified as the chief operating decision maker (CODM).

The Group organized its operations into two segments: LiDAR segment and gas detection segment. The financial information of the respective segments are disclosed in Note 22.

Concentration of risks

Concentration of credit risk

Concentration of customers

The following customers accounted for 10% or more of revenue for the years ended December 31, 2020, 2021 and 2022:


	For the Year ended
	December 31,
	2020		2021		2022
Customer A	—	*	—	*	24.3	%
Customer B	10.4	%	17.5	%	13.7	%
Customer C	—	*	12.7	%	—	*
Customer D	11.6	%	—	*	—	*

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of customers - continued

The following customers accounted for 10% or more of the Group’s accounts receivable, contract assets and amount due from related parties as of December 31, 2021 and 2022:


	As of December 31,
	2021		2022
Customer A	—	*	61.0	%
Customer B	64.4	%	15.3	%

Concentration of suppliers

The Group has one supplier accounted for 10% or more of purchases for the years ended December 31, 2020, 2021 and 2022:


	For the Year Ended December 31,
	2020		2021		2022
Supplier A	11.5	%	13.7	%	12.3	%

Foreign currency risk

Recent accounting pronouncements

Convenience translation

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of property and equipment over estimated useful life

Electronic equipment		3 – 5 years
Machinery and equipment		10 years
Furniture and fixture		5 years
Transportation vehicles		4 years
Leasehold improvements		Over the shorter of the expected lease term or useful lives

Schedule of intangible assets useful life

Software		3 – 10 years
Technology		3 – 5 years

Schedule of accrued warranty liability


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance as of the beginning of the year	7,457	10,042	13,932
Warranty provision	8,752	10,766	8,467
Consumption	(6,167)	(6,876)	(4,705)
Balance as of the end of the year	10,042	13,932	17,694

Schedule of impact on condensed consolidated balance sheets


	December 31, 2021	January 1, 2022
		Effect of the	After adoption
	As reported	adoption of ASC 842	of ASC 842
	RMB	RMB	RMB
ASSETS
Right-of-use assets	—	36,030	36,030
TOTAL ASSETS	—	36,030	36,030
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued expenses and other current liabilities	569	12,566	13,135
Lease liabilities, non-current	—	23,464	23,464
TOTAL LIABILITIES	569	36,030	36,599
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	569	36,030	36,599

Schedule of concentration of risks

Concentration of customers

The following customers accounted for 10% or more of revenue for the years ended December 31, 2020, 2021 and 2022:


	For the Year ended
	December 31,
	2020		2021		2022
Customer A	—	*	—	*	24.3	%
Customer B	10.4	%	17.5	%	13.7	%
Customer C	—	*	12.7	%	—	*
Customer D	11.6	%	—	*	—	*

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of customers - continued

The following customers accounted for 10% or more of the Group’s accounts receivable, contract assets and amount due from related parties as of December 31, 2021 and 2022:


	As of December 31,
	2021		2022
Customer A	—	*	61.0	%
Customer B	64.4	%	15.3	%

Concentration of suppliers

The Group has one supplier accounted for 10% or more of purchases for the years ended December 31, 2020, 2021 and 2022:


	For the Year Ended December 31,
	2020		2021		2022
Supplier A	11.5	%	13.7	%	12.3	%

ACCOUNTS RECEIVABLE, NET (Tables)

12 Months Ended

Dec. 31, 2022

ACCOUNTS RECEIVABLE, NET

Schedule of accounts receivable and expected credit losses


	As of December 31,
	2021	2022
	RMB	RMB
Accounts receivable	93,115	491,293
Less: allowance for expected credit losses	(7,294)	(6,249)
Total accounts receivable, net	85,821	485,044

Schedule of allowance for credit losses related to accounts receivable


	For the Year ended December 31,
	2021	2022
	RMB	RMB
Balance at beginning of year	5,270	7,294
Provision (reversal) for expected credit losses	2,024	(1,045)
Balance at end of year	7,294	6,249

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2022

INVENTORIES

Schedule of inventories


	As of December 31,
	2021	2022
	RMB	RMB
Raw materials	123,940	290,121
Work-in-process	91,898	180,367
Finished goods	160,406	176,364
Inventories	376,244	646,852

PREPAYMENTS AND OTHER CURRENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

PREPAYMENTS AND OTHER CURRENT ASSETS

Schedule of prepayments and other current assets


	As of December 31,
	2021	2022
	RMB	RMB
Advances to suppliers	53,666	82,419
Deposits	8,941	11,998
Prepaid expenses	9,123	10,108
Value-added tax recoverable	9,360	6,748
Others	8,029	15,179
Total	89,119	126,452

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2022

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment


	As of December 31,
	2021	2022
	RMB	RMB
Cost
Electronic equipment	46,856	79,663
Leasehold improvements	48,901	63,995
Machinery and equipment	12,622	121,614
Furniture and fixture	32,599	54,851
Transportation vehicles	2,003	4,411
Total cost	142,981	324,534
Less: Accumulated depreciation	(39,810)	(84,329)
Property and equipment, net	103,171	240,205
Construction in Progress	218,456	264,748
Total	321,627	504,953

LONG-TERM INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2022

LONG-TERM INVESTMENTS

Schedule of investment in equity method investee


	As of December 31,
	2021	2022
	RMB	RMB
Investments in equity securities	—	30,000
Investments in equity method investee	1,902	1,856
Total	1,902	31,856

INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2022

INTANGIBLE ASSETS, NET

Schedule of intangible assets over the respective useful lives


	As of December 31,
	2021	2022
	RMB	RMB
Software	21,346	30,095
Technology	8,178	8,390
Total cost	29,524	38,485
Less: Accumulated amortization	(9,971)	(17,885)
Intangible assets, net	19,553	20,600

OTHER NON-CURRENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

OTHER NON-CURRENT ASSETS

Schedule of other non-current assets


	As of December 31,
	2021	2022
	RMB	RMB
Prepayments for purchase of property and equipment	55,207	46,083
Demonstration fleet	5,790	4,936
Long-term deposits	6,909	3,836
Others	2,053	2,243
Other non-current assets	69,959	57,098

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2022

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of December 31,
	2021	2022
	RMB	RMB
Salaries and welfare payables	122,489	166,923
Payables for purchase of property and equipment	114,446	102,181
Accrued expenses	12,798	41,558
Current portion of operating lease liabilities	—	34,975
VAT and other tax payables	115,540	5,903
Advances from employee	5,581	4,962
Total	370,854	356,502

LEASES (Tables)

12 Months Ended

Dec. 31, 2022

LEASES

Schedule of maturities of lease liabilities in accordance with leases


		As of
		December 31, 2021
		RMB
2022		30,429
2023		26,071
2024		4,536
2025		3,096
Total lease payment		64,132


		As of
		December 31, 2022
		RMB
2023		36,025
2024		7,145
2025		3,282
Total lease payment		46,452
Less: imputed interest		(1,338)
Present value of minimum operating lease payments		45,114
Less: Current operating lease liabilities		(34,975)
Long-term operating lease liabilities		10,139

LONG-TERM BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2022

LONG-TERM BORROWINGS

Schedule of principal payments for outstanding long-term loans


For the year ended December 31,		RMB
2025		5,542
2026		5,542
2027		7,388
Total		18,472

REDEEMABLE EQUITY (Tables)

12 Months Ended

Dec. 31, 2022

REDEEMABLE EQUITY

Schedule of redeemable equity financing


		As		Proceeds			Upon
		percent of		from	December 31,	August 1,	Completion	December 31,
		equity at		Issuance, net	2019	2020	of the 2020	2020
	Issuance	issuance		of issuance	Carrying	Carrying	Reorganization	Carrying
Series	Date	date		cost	Amount	Amount	Amount	Amount
				RMB	RMB	RMB	RMB	RMB
Series A+	March 2017	10.9	%	75,750	93,773	93,773	(93,773)	—
Series B	November 2017	10.9	%	104,611	124,645	124,645	(124,645)	—
Series B+	June 2018	6.0	%	96,316	109,525	109,525	(109,525)	—
Series C-1	May 2019	7.8	%	261,635	273,503	273,503	(273,503)	—
Series C-2	June 2019	7.0	%	254,052	265,060	265,060	(265,060)	—
Series C-3	July 2019	5.8	%	224,054	232,133	232,133	(232,133)	—
Total				1,016,418	1,098,639	1,098,639	(1,098,639)	—

REDEEMABLE SHARES (Tables)

12 Months Ended

Dec. 31, 2022

REDEEMABLE SHARES

Schedule of redeemable shares


		Carrying value at	Change in	Carrying value at
	Number	the date of re-	carrying	December 31,
Series	of shares	classification	value	2021
		RMB	RMB	RMB
Series A+	3,029,522	284,480	—	284,480
Series B	7,881,155	742,091	—	742,091
Series B+	3,957,617	375,599	—	375,599
Series C-1	4,289,102	416,021	—	416,021
Series C-2	6,176,311	598,974	—	598,974
Series C-3	5,594,483	542,489	—	542,489
Series C+	956,657	96,763	—	96,763
Series D	22,666,666	2,404,316	79,758	2,484,074
Total	54,551,513	5,460,733	79,758	5,540,491


			Change in
	Number of	Carrying value at	carrying	Carrying value at
Series	shares	December 31, 2021	value	December 31, 2022
		RMB	RMB	RMB
Series A+	3,029,522	284,480	—	284,480
Series B	7,881,155	742,091	—	742,091
Series B+	3,957,617	375,599	—	375,599
Series C-1	4,289,102	416,021	—	416,021
Series C-2	6,176,311	598,974	—	598,974
Series C-3	5,594,483	542,489	—	542,489
Series C+	956,657	96,763	—	96,763
Series D	22,666,666	2,484,074	446,419	2,930,493
Total	54,551,513	5,540,491	446,419	5,986,910

Schedule of redemption value of the redeemable shares


		Redemption
		value as of
Series		December 31, 2022
		RMB
Series A+		53,514
Series B		157,050
Series B+		110,451
Series C-1		226,775
Series C-2		324,984
Series C-3		292,483
Series C+		83,599
Series D		2,930,544
Total		4,179,400

NET REVENUES (Tables)

12 Months Ended

Dec. 31, 2022

NET REVENUES

Schedule of net revenues


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Product revenues
Revenue from LiDAR products	346,068	685,333	1,122,237
Revenue from gas detection products	68,599	19,533	23,967
Other revenues	847	1,200	5,663
Service revenues
Engineering design, development and validation service	—	14,026	43,101
Extended warranties	—	676	7,702
Total	415,514	720,768	1,202,670


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Revenue by geographic location
Mainland China	185,516	269,634	697,294
North America	201,194	352,981	358,549
Europe	16,589	67,912	86,153
Other regions	12,215	30,241	60,674
Net revenues	415,514	720,768	1,202,670

Schedule of movements of the accounts receivable and contract balances


	Accounts	Contract	Contract
	Receivable	assets	liabilities
	RMB	RMB	RMB
Opening Balance as of January 1, 2020	36,511	—	11,843
Increase(decrease), net	19,808	38,337	(2,486)
Opening Balance as of January 1, 2021	56,319	38,337	9,357
Increase, net	29,502	108,200	113,246
Ending Balance as of December 31, 2021	85,821	146,537	122,603
Increase(decrease), net	399,223	(133,937)	(82,225)
Ending Balance as of December 31, 2022	485,044	12,600	40,378

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAXES

Schedule of current and deferred portion of income tax expenses


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Current tax expenses	—	—	2
Over-provision in prior year	(125)	(1,057)	—
Deferred tax benefits	(74)	(58)	(68)
Income tax (benefits) expenses	(199)	(1,115)	(66)

Schedule of net loss before income tax


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net loss before income tax from PRC operations	(104,524)	(92,498)	(251,302)
Net loss before income tax from non-PRC operations	(2,891)	(153,444)	(49,529)
Total net loss before income tax	(107,415)	(245,942)	(300,831)

Schedule of reconciliation between the effective income tax rate and statutory income tax rate


	For the Year ended December 31,
	2020		2021		2022
Statutory income tax rate	25.00	%	25.00	%	25.00	%
Effect of different tax rate of different jurisdictions	0.10	%	(4.39)	%	(3.09)	%
Non-deductible expenses	(0.30)	%	(17.98)	%	(6.12)	%
Effect of super deduction on R&D expenses	38.83	%	34.83	%	41.00	%
Effect of change of valuation allowance	(63.56)	%	(37.44)	%	(56.77)	%
Over provision for prior years	0.12	%	0.43	%	—
Income tax expenses	0.19	%	0.45	%	0.02	%

Schedule of deferred tax assets and deferred tax liabilities


	As of December 31,
	2021	2022
	RMB	RMB
Deferred tax assets
– Net operating loss carry forwards	220,480	373,215
– Deductible temporary differences	11,562	31,348
– Deferred revenue	9,443	6,294
Less: valuation allowance	(241,485)	(410,857)
Net deferred tax assets	—	—
Deferred tax liabilities
– Identifiable intangible assets from business combination.	466	439
Total deferred tax liabilities	466	439

Schedule of movement of valuation allowance


	For the Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance at beginning of the year	67,985	136,269	241,485
Addition	68,284	105,216	169,372
Total	136,269	241,485	410,857

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2022

SHARE-BASED COMPENSATION

Schedule of assumptions used to estimate the fair values of the share options granted


	For the year ended
	December 31, 2021		December 31, 2022
Expected volatility	48.00% – 74.00	%	74.00% – 80.00	%
Risk-free interest rate (per annum)	0.97% – 1.55	%	1.94% – 3.83	%
Expected dividend yield	0.00	%	0.00	%
Employee forfeiture rate (per annum)	3.80	%	3.80% – 3.92	%
Exercise multiples	2.50		2.50
Expected term	7.00		7.00
Fair value of underlying ordinary share (per share)	US$14.10 – 18.42		US$18.11 – 19.91
Fair value of awards on valuation date	US$5.84 – 16.90		US$12.93 – 17.11

Schedule of stock option activity


				Weighted
		Weighted	Weighted	average
	Number	average	average	remaining	Aggregate
	of	exercise	grant date	contract	intrinsic
	options	price	fair value	life	value
		RMB	RMB	Years	RMB
Outstanding at January 1, 2021	—	—	—	—	—
Granted (the 2017 Replacement and the 2020 Replacement)	5,419,677	3.87	22.83
Granted (the New Grant)	4,286,828	15.25	102.74
Forfeited	220,831	5.96
Cancelled	312,051	0.90
Exercised	—	—
Outstanding at January 1, 2022	9,173,623	9.23	56.58	6.32	1,005,546
Granted (the New Grant)	1,158,201	33.92	121.62
Forfeited	723,190	13.85
Exercised	—	—
Outstanding at December 31, 2022	9,608,634	12.51	65.93	5.46	1,141,255
Vested and expected to vest as of December 31, 2022.	5,088,920	19.66	101.08	5.88	568,013
Exercisable as of December 31, 2022	1,794,795	12.51	65.93	5.46	213,122

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

Schedule of companies that are related parties


Name of the related parties		Relationship
Mr. Kai Sun		Founding Shareholders
Mr. Yifan Li		Founding Shareholders
Mr. Shaoqing Xiang		Founding Shareholders
Mr. Minglie Hu		Shareholder
Mr. Min Ai		Shareholder
Shanghai Kunjie Phototonics Technology Co., Ltd.		An equity method investee of the Group
Shanghai Leyi Technology L.P.		An affiliate of the shareholder of the Group
Robert Bosch Kft.		An affiliate of the shareholder of the Group
Robert Bosch Ltd.		An affiliate of the shareholder of the Group
Robert Bosch France		An affiliate of the shareholder of the Group
Bosch Automotive Products (Suzhou) Co., Ltd.		An affiliate of the shareholder of the Group
Baidu USA LLC (Note)		An affiliate of the shareholder of the Group
Beijing Baidu Netcom Technology Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Guangzhou) Co., Ltd.		An affiliate of the shareholder of the Group
Baidu Smart Travel Information Technology (Chongqing) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Hefei) Co., Ltd.		An affiliate of the shareholder of the Group
Luobo Yunli (Beijing) Technology Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Transportation Technology (Dalian) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Technology (Beijing) Co., Ltd.		An affiliate of the shareholder of the Group
Apollo Intelligent Connection (Beijing) Co., Ltd.		An affiliate of the shareholder of the Group

Schedule of significant related party transactions


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net revenues
Affiliates of the shareholders of the Group	41,765	15,655	—
Total	41,765	15,655	—


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Research and development expenses
An equity method investee of the Group	900	—	—
Total	900	—	—


	For year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Purchases
An equity method investee of the Group	83	—	—
Total	83	—	—

Schedule of outstanding balances with related parties


	As of December 31,
	2020	2021	2022
	RMB	RMB	RMB
Amounts due from related parties, net of allowance
Affiliates of the shareholder of the Group	28,088	—	—
An equity method investee of the Group	—	—	—
Total	28,088	—	—


	As of December 31,
	2021	2022
	RMB	RMB
Amounts due to related parties
Founding Shareholders and certain shareholders (Note)	307,498	334,283
Total	307,498	334,283

LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2022

LOSS PER SHARE

Schedule of calculation of net loss per share,


	For the year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Numerator
Net loss	(107,216)	(244,827)	(300,765)
Deemed dividend	—	(2,211,330)	(446,419)
Net loss attributable to ordinary shareholders	(107,216)	(2,456,157)	(747,184)
Denominator
Weighted average number of ordinary shares outstanding-basic and diluted	89,895,471	104,987,478	115,534,593
Basic and diluted net loss per share attributable to ordinary shareholders	(1.19)	(23.39)	(6.47)

Schedule of share options were excluded from the calculation of diluted net loss per ordinary share


	For the year ended December 31,
	2020	2021	2022
	Number	Number	Number
Shares issuable upon exercise of share options	5,490,261	9,173,623	9,608,634

SEGMENT (Tables)

12 Months Ended

Dec. 31, 2022

SEGMENT

Schedule of operating segment results


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
LiDAR segment
LiDAR product revenues	346,915	701,235	1,178,703
Cost of revenues	155,986	330,769	720,300
Segment profit	190,929	370,466	458,403
Gas detection segment
Gas detection product revenues	68,599	19,533	23,967
Cost of products sold	20,614	8,203	10,383
Segment profit	47,985	11,330	13,584
Total segment profit	238,914	381,796	471,987

Schedule of reconciliation of the reportable segments' to consolidated loss before income tax


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Total profit for reportable segments	238,914	381,796	471,987
Unallocated amounts*
Sales and marketing expenses	(49,904)	(69,266)	(104,835)
General and administrative expenses	(76,553)	(236,713)	(201,007)
Research and development expenses	(229,653)	(368,435)	(555,179)
Other operating income, net	15,384	27,333	10,817
Interest income	20,925	32,584	58,734
Foreign exchange (loss) gains	(25,696)	(13,275)	20,858
Other (loss) income, net	(828)	118	(2,161)
Loss before income tax	(107,411)	(245,858)	(300,786)

*The Group does not distinguish expenses between segments in its internal reporting, and reports expenses by nature as a whole.

Schedule of long-term assets disaggregated by the different geographic locations


	Year ended December 31,
	2021	2022
	RMB	RMB
Mainland China	432,528	665,511
North America	3,430	14,351
Total Long-term assets	435,958	679,862

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum capital payment under non-cancellable agreements


		As of December 31,
		2022
		RMB
2023		314,793
2024		11,675
Total		326,468

ORGANIZATION AND NATURE OF OPERATIONS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 CNY (¥)	Dec. 31, 2022 USD ($)	Jun. 30, 2021 shares	May 31, 2021 shares
ORGANIZATION AND NATURE OF OPERATIONS
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization			¥ 507,620,000
Subscription receivables	¥ 310,227,000		310,227,000	$ 44,979
Capital gain tax payments on behalf of certain shareholders	¥ 82,347
IPO \| Class B
ORGANIZATION AND NATURE OF OPERATIONS
Number of shares issued \| shares	10,125,118	10,125,118
Net proceeds from IPO \| $		$ 179,800
Shanghai Hesai
ORGANIZATION AND NATURE OF OPERATIONS
Settlement through cash redemption			817,847
Cash distribution to shareholders of Shanghai Hesai in connection with the 2021 Reorganization			507,620
Subscription receivables			¥ 310,227
Shanghai Hesai \| Founding shareholders
ORGANIZATION AND NATURE OF OPERATIONS
Percentage of equity interest acquired					100.00%
Shanghai Hesai \| Founding shareholders \| Class A
ORGANIZATION AND NATURE OF OPERATIONS
Number of shares subscribed \| shares					30,033,379	30,033,379
Shanghai Hesai \| Existing investors \| Class B
ORGANIZATION AND NATURE OF OPERATIONS
Number of shares subscribed \| shares					62,834,548	62,834,548

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value measurements (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Level 2
Fair value measurements
Short-term investments	¥ 945,865	¥ 2,342,743

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net (Details)	12 Months Ended
	Dec. 31, 2022
Electronic equipment \| Minimum
Property and equipment, net
Estimated useful life of property and equipment	3 years
Electronic equipment \| Maximum
Property and equipment, net
Estimated useful life of property and equipment	5 years
Machinery and equipment
Property and equipment, net
Estimated useful life of property and equipment	10 years
Furniture and fixture
Property and equipment, net
Estimated useful life of property and equipment	5 years
Transportation vehicles
Property and equipment, net
Estimated useful life of property and equipment	4 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details)	12 Months Ended
	Dec. 31, 2022
Software \| Minimum
INTANGIBLE ASSETS, NET
Useful life of intangible assets	3 years
Software \| Maximum
INTANGIBLE ASSETS, NET
Useful life of intangible assets	10 years
Technology \| Minimum
INTANGIBLE ASSETS, NET
Useful life of intangible assets	3 years
Technology \| Maximum
INTANGIBLE ASSETS, NET
Useful life of intangible assets	5 years
Land-use rights
INTANGIBLE ASSETS, NET
Useful life of intangible assets	50 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Goodwill
Equity method investment, impairment	¥ 0		¥ 0	¥ 0
Extended warranty service expense	7,702,000		676,000	0
Accrued warranty liability
Balance as of the beginning of the year	13,932,000		10,042,000	7,457,000
Warranty provision	8,467,000		10,766,000	8,752,000
Consumption	(4,705,000)		(6,876,000)	(6,167,000)
Balance as of the end of the year	¥ 17,694,000	$ 2,565	13,932,000	10,042,000
Minimum
Goodwill
Period for extended warranty	1 year	1 year
Maximum
Goodwill
Period for extended warranty	2 years	2 years
Oxigraf Inc.
Goodwill
Percentage of equity interest acquired	100.00%	100.00%
Impairment on goodwill	¥ 0		¥ 0	¥ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - impact on the condensed consolidated balance sheets upon adoption of ASC842 (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liabilities	¥ 45,114
ASSETS
Right-of-use assets	44,349	$ 6,430
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued Liabilities and Other Liabilities, as Reported			¥ 569
Liabilities, Total, as Reported			569
Liabilities and Equity, Total, as Reported			¥ 569
Operating Lease, Liability, Current	¥ 34,975
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued Liabilities and Other Liabilities	Accrued Liabilities and Other Liabilities	Accrued Liabilities and Other Liabilities
Operating Lease, Liability, Noncurrent	¥ 10,139	$ 1,470
ASC 842 \| Effect
ASSETS
Right-of-use assets			¥ 36,030
TOTAL ASSETS			36,030
LIABILITIES AND SHAREHOLDERS' EQUITY
Operating Lease, Liability, Current			12,566
Operating Lease, Liability, Noncurrent			23,464
TOTAL LIABILITIES			36,030
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			36,030
ASC 842 \| After adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liabilities			36,599
ASSETS
Right-of-use assets			36,030
TOTAL ASSETS			36,030
LIABILITIES AND SHAREHOLDERS' EQUITY
Operating Lease, Liability, Current			13,135
Operating Lease, Liability, Noncurrent			23,464
TOTAL LIABILITIES			36,599
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			¥ 36,599

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) segment	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government grants related to unfulfilled obligations	¥ 0	¥ 0	¥ 7,614
Government grants income	10,825	27,446	15,384
Income tax, unrecognized	¥ 0	0
Number of operating segments \| segment	2
Fair value investments recognized	¥ 0	¥ 0	¥ 0
Revenue \| Customer concentration \| Customer A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk	24.30%
Revenue \| Customer concentration \| Customer B
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk	13.70%	17.50%	10.40%
Revenue \| Customer concentration \| Customer C
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk		12.70%
Revenue \| Customer concentration \| Customer D
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk			11.60%
Accounts receivables \| Customer concentration \| Customer A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk	61.00%
Accounts receivables \| Customer concentration \| Customer B
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk	15.30%	64.40%
Accounts payable \| Supplier concentration \| Supplier A
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Percentage of concentration risk	12.30%	13.70%	11.50%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency risk and Convenience translation (Details) $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents and time deposits	$ 51,351	$ 26,545
Exchange rate used for translations of balances	6.8972

ACCOUNTS RECEIVABLE, NET (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
ACCOUNTS RECEIVABLE, NET
Accounts receivable	¥ 491,293		¥ 93,115
Less: allowance for expected credit losses	(6,249)		(7,294)
Total accounts receivable, net	¥ 485,044	$ 70,325	¥ 85,821	¥ 56,319	¥ 36,511

ACCOUNTS RECEIVABLE, NET - Allowance for credit losses (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
ACCOUNTS RECEIVABLE, NET
Balance at beginning of year	¥ 7,294	¥ 5,270
Provision (reversal) for expected credit losses	(1,045)	2,024
Balance at end of year	¥ 6,249	¥ 7,294

INVENTORIES (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
INVENTORIES (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 USD ($)
INVENTORIES
Raw materials	¥ 290,121		¥ 123,940
Work-in-process	180,367		91,898
Finished goods	176,364		160,406
Inventories	646,852		376,244		$ 93,785
Inventory write-down	¥ 39,431	$ 5,717	¥ 16,600	¥ 7,060

PREPAYMENTS AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
PREPAYMENTS AND OTHER CURRENT ASSETS
Advances to suppliers	¥ 82,419		¥ 53,666
Deposits	11,998		8,941
Prepaid expenses	10,108		9,123
Value-added tax recoverable	6,748		9,360
Others	15,179		8,029
Total	¥ 126,452	$ 18,333	¥ 89,119

PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2022 USD ($)
Property and equipment, net
Cost	¥ 324,534	¥ 142,981
Less: Accumulated depreciation	(84,329)	(39,810)
Total	504,953	321,627	$ 73,211
Depreciation expenses	44,856	21,187
Electronic equipment
Property and equipment, net
Cost	79,663	46,856
Leasehold improvements
Property and equipment, net
Cost	63,995	48,901
Machinery and equipment
Property and equipment, net
Cost	121,614	12,622
Furniture and fixture
Property and equipment, net
Cost	54,851	32,599
Transportation vehicles
Property and equipment, net
Cost	4,411	2,003
Property and equipment, net
Property and equipment, net
Total	240,205	103,171
Construction in progress
Property and equipment, net
Total	¥ 264,748	¥ 218,456

LONG-TERM INVESTMENTS (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Jul. 31, 2022 CNY (¥)
LONG-TERM INVESTMENTS
Long-term investments	¥ 31,856		¥ 1,902
Investment in equity securities without readily determinable fair value	0		0	¥ 0
Share of loss in equity method investment	(45)	$ (7)	(84)	(4)
Equity method investment, impairment	0		0	¥ 0
Vertilite
LONG-TERM INVESTMENTS
Percentage of equity interest acquired					1.20%
Investment in equity securities without readily determinable fair value					¥ 30,000
Investments in equity securities
LONG-TERM INVESTMENTS
Long-term investments	30,000
Investments in equity method investee
LONG-TERM INVESTMENTS
Long-term investments	¥ 1,856		¥ 1,902

INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
INTANGIBLE ASSETS, NET (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
INTANGIBLE ASSETS, NET
Total cost	¥ 38,485	¥ 29,524
Less: Accumulated amortization	(17,885)	(9,971)
Intangible assets, net	20,600	19,553
Amortization expenses	7,914	6,326
Software
INTANGIBLE ASSETS, NET
Total cost	30,095	21,346
Technology
INTANGIBLE ASSETS, NET
Total cost	¥ 8,390	¥ 8,178

INTANGIBLE ASSETS, NET - Expected amortization expenses (Details) ¥ in Thousands	Dec. 31, 2022 CNY (¥)
INTANGIBLE ASSETS, NET
2023	¥ 7,053
2024	4,237
2025	2,975
2026	2,425
2027 and thereafter	¥ 3,910

LAND-USE RIGHTS, NET (Details) ¥ in Thousands	1 Months Ended	12 Months Ended
LAND-USE RIGHTS, NET (Details) ¥ in Thousands	Mar. 31, 2021 CNY (¥) m²	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
LAND-USE RIGHTS, NET
Purchases of land-use right			¥ 43,188
Amortization expenses		¥ 7,914	6,326
Land-use rights
LAND-USE RIGHTS, NET
Useful life of intangible assets		50 years
Land-use rights \| Land in Shanghai
LAND-USE RIGHTS, NET
Purchases of land-use right	¥ 43,188
Number of square meters acquired \| m²	26,615
Useful life of intangible assets	50 years
Amortization expenses		¥ 864	¥ 718	¥ 0

OTHER NON-CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
OTHER NON-CURRENT ASSETS
Prepayments for purchase of property and equipment	¥ 46,083		¥ 55,207
Demonstration fleet	4,936		5,790
Long-term deposits	3,836		6,909
Others	2,243		2,053
Other non-current assets	¥ 57,098	$ 8,278	¥ 69,959

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Salaries and welfare payables	¥ 166,923		¥ 122,489
Payables for purchase of property and equipment	102,181		114,446
Accrued expenses	41,558		¥ 12,798
Operating lease liabilities, current	¥ 34,975
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
VAT and other tax payables	¥ 5,903		¥ 115,540
Advances from employee	4,962		5,581
Accrued expenses and other current liabilities	¥ 356,502	$ 51,689	¥ 370,854

LEASES - Maturities of lease liabilities (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
LEASES
2022 / 2023	¥ 36,025		¥ 30,429
2023 / 2024	7,145		26,071
2024 / 2025	3,282		4,536
2025			3,096
Total	46,452		¥ 64,132
Less: imputed interest	(1,338)
Operating lease liabilities	45,114
Operating lease liabilities, current	(34,975)
Long-term operating lease liabilities	¥ 10,139	$ 1,470

LEASES - Additional Information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 USD ($)
LEASES
Right-of-use assets	¥ 44,349			$ 6,430
Operating lease liabilities, current	34,975
Long-term operating lease liabilities	¥ 10,139			$ 1,470
Weighted average remaining lease term	1 year 10 months 9 days			1 year 10 months 9 days
Weighted average discount rate	4.25%			4.25%
Lease expenses	¥ 34,596	¥ 21,792	¥ 15,465
Short-term leases not capitalized	2,127	¥ 2,127	¥ 2,127
Cash payments for operating lease liabilities	28,163
Right-of-use assets obtained in exchange for operating lease liabilities	¥ 37,414

LONG-TERM BORROWINGS - Scheduled principal payments for the outstanding long-term loans (Details) - Dec. 31, 2022 ¥ in Thousands, $ in Thousands	CNY (¥)	USD ($)
LONG-TERM BORROWINGS
2025	¥ 5,542
2026	5,542
2027	7,388
Total	¥ 18,472	$ 2,678

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

LONG-TERM BORROWINGS - Additional Information (Details) - CNY (¥) ¥ in Thousands		1 Months Ended	12 Months Ended
	Nov. 18, 2022	Nov. 30, 2022	Dec. 31, 2022
LONG-TERM BORROWINGS
Term of borrowings (in years)	2 years	1 year
Line of credit facility, maximum borrowing capacity	¥ 700,000
Period of LPR considered	1 year
Percentage of difference to LPR	100.00%
Amount withdrawn			¥ 18,472
Interest rate			2.65%
Unused bank facility			¥ 681,528

REDEEMABLE EQUITY (Details) - CNY (¥)		12 Months Ended
REDEEMABLE EQUITY (Details) - CNY (¥)	Aug. 01, 2020	Dec. 31, 2021	Dec. 31, 2019
REDEEMABLE EQUITY
Proceeds from issuance of ordinary shares of Hesai Group		¥ 453,978,000
Redeemable equity shares
REDEEMABLE EQUITY
Percentage of redeemable equity out of total equity interest			40.80%
2020 Reorganization \| Shanghai Hesai
REDEEMABLE EQUITY
Proceeds from issuance of ordinary shares of Hesai Group	¥ 0
2020 Reorganization \| Shanghai Hesai \| Redeemable equity shares
REDEEMABLE EQUITY
Number of shares issued	51,485,191
Proceeds from issuance of ordinary shares of Hesai Group	¥ 0
Transfer from accumulated deficits to additional paid in capital	¥ 221,929,000

REDEEMABLE EQUITY - Redeemable equity financing (Details) - CNY (¥) ¥ in Thousands	3 Months Ended	5 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2022	Dec. 31, 2019
REDEEMABLE EQUITY
Proceeds from Issuance, net of issuance cost			¥ 1,016,418
Carrying amount				¥ 1,098,639
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		¥ 1,098,639
Upon Completion of the 2020 Reorganization		(1,098,639)
Compounded interest rate	8.00%		8.00%
Minimum percentage on issuance price and unpaid dividends for no liquidation preference			140.00%
Series A+
REDEEMABLE EQUITY
As percent of equity at issuance date			10.90%
Proceeds from Issuance, net of issuance cost			¥ 75,750
Carrying amount				93,773
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		93,773
Upon Completion of the 2020 Reorganization		(93,773)
Series B
REDEEMABLE EQUITY
As percent of equity at issuance date			10.90%
Proceeds from Issuance, net of issuance cost			¥ 104,611
Carrying amount				124,645
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		124,645
Upon Completion of the 2020 Reorganization		(124,645)
Series B+
REDEEMABLE EQUITY
As percent of equity at issuance date			6.00%
Proceeds from Issuance, net of issuance cost			¥ 96,316
Carrying amount				109,525
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		109,525
Upon Completion of the 2020 Reorganization		(109,525)
Series C-1
REDEEMABLE EQUITY
As percent of equity at issuance date			7.80%
Proceeds from Issuance, net of issuance cost			¥ 261,635
Carrying amount				273,503
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		273,503
Upon Completion of the 2020 Reorganization		(273,503)
Series C-2
REDEEMABLE EQUITY
As percent of equity at issuance date			7.00%
Proceeds from Issuance, net of issuance cost			¥ 254,052
Carrying amount				265,060
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		265,060
Upon Completion of the 2020 Reorganization		(265,060)
Series C-3
REDEEMABLE EQUITY
As percent of equity at issuance date			5.80%
Proceeds from Issuance, net of issuance cost			¥ 224,054
Carrying amount				¥ 232,133
Increase (Decrease) in Temporary Equity [Roll Forward]
Balance at the beginning of the year		232,133
Upon Completion of the 2020 Reorganization		¥ (232,133)

REDEEMABLE SHARES (Details) ¥ in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
REDEEMABLE SHARES (Details) ¥ in Thousands, $ in Thousands	Jun. 30, 2021 CNY (¥) shares	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
REDEEMABLE SHARES
Threshold period from dates of the agreements to complete overseas IPO	12 months
Compounded interest rate	8.00%	8.00%	8.00%
Fair value of the reclassified shares \| ¥	¥ 3,056,417
Deemed dividend	¥ 2,131,572	¥ 446,419	$ 64,725	¥ 2,211,330
Class B
REDEEMABLE SHARES
Option to re-designate to preferred shares on failure to complete overseas IPO with in the threshold period, shares	54,551,513
Number of shares reclassified from permanent to mezzanine equity	54,551,513

REDEEMABLE SHARES - Details of redeemable shares (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2022 USD ($) shares
REDEEMABLE SHARES
Number of shares \| shares	54,551,513	54,551,513	54,551,513
Carrying value at reclassification	¥ 5,540,491	¥ 5,460,733
Change in carrying value	446,419	79,758
Carrying value	¥ 5,986,910	¥ 5,540,491	$ 868,020
Series A+
REDEEMABLE SHARES
Number of shares \| shares	3,029,522	3,029,522	3,029,522
Carrying value at reclassification	¥ 284,480	¥ 284,480
Carrying value	¥ 284,480	¥ 284,480
Series B
REDEEMABLE SHARES
Number of shares \| shares	7,881,155	7,881,155	7,881,155
Carrying value at reclassification	¥ 742,091	¥ 742,091
Carrying value	¥ 742,091	¥ 742,091
Series B+
REDEEMABLE SHARES
Number of shares \| shares	3,957,617	3,957,617	3,957,617
Carrying value at reclassification	¥ 375,599	¥ 375,599
Carrying value	¥ 375,599	¥ 375,599
Series C-1
REDEEMABLE SHARES
Number of shares \| shares	4,289,102	4,289,102	4,289,102
Carrying value at reclassification	¥ 416,021	¥ 416,021
Carrying value	¥ 416,021	¥ 416,021
Series C-2
REDEEMABLE SHARES
Number of shares \| shares	6,176,311	6,176,311	6,176,311
Carrying value at reclassification	¥ 598,974	¥ 598,974
Carrying value	¥ 598,974	¥ 598,974
Series C-3
REDEEMABLE SHARES
Number of shares \| shares	5,594,483	5,594,483	5,594,483
Carrying value at reclassification	¥ 542,489	¥ 542,489
Carrying value	¥ 542,489	¥ 542,489
Series C+
REDEEMABLE SHARES
Number of shares \| shares	956,657	956,657	956,657
Carrying value at reclassification	¥ 96,763	¥ 96,763
Carrying value	¥ 96,763	¥ 96,763
Series D
REDEEMABLE SHARES
Number of shares \| shares	22,666,666	22,666,666	22,666,666
Carrying value at reclassification	¥ 2,484,074	¥ 2,404,316
Change in carrying value	446,419	79,758
Carrying value	2,930,493	2,484,074
Change in redemption value	¥ 446,419	¥ 79,758

REDEEMABLE SHARES - Redemption value (Details) ¥ in Thousands	Dec. 31, 2022 CNY (¥)
REDEEMABLE SHARES
Redemption Value	¥ 4,179,400
Re-designate ordinary shares to preferred shares	0
Series A+
REDEEMABLE SHARES
Redemption Value	53,514
Series B
REDEEMABLE SHARES
Redemption Value	157,050
Series B+
REDEEMABLE SHARES
Redemption Value	110,451
Series C-1
REDEEMABLE SHARES
Redemption Value	226,775
Series C-2
REDEEMABLE SHARES
Redemption Value	324,984
Series C-3
REDEEMABLE SHARES
Redemption Value	292,483
Series C+
REDEEMABLE SHARES
Redemption Value	83,599
Series D
REDEEMABLE SHARES
Redemption Value	¥ 2,930,544

ORDINARY SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands	1 Months Ended			12 Months Ended
	Sep. 30, 2021 CNY (¥) shares	Sep. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2021 shares	Dec. 31, 2022 Vote	Dec. 31, 2021 CNY (¥)
ORDINARY SHARES
Cash consideration \| ¥					¥ 453,978
Class A
ORDINARY SHARES
Number of votes per share \| Vote				10
Class B
ORDINARY SHARES
Number of votes per share \| Vote				1
Shares issued upon conversion of ordinary shares \| shares	18,424,242	18,424,242	18,424,242
Temporary equity, shares issued, new issues \| shares	4,242,424	4,242,424
Temporary equity, issue price per share \| $ / shares		$ 16.50
Cash consideration	¥ 453,978	$ 70,000

NET REVENUES (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
NET REVENUES (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
NET REVENUES
Net revenues	¥ 1,202,670	$ 174,371	¥ 720,768	¥ 415,514
Revenue from LiDAR products
NET REVENUES
Net revenues	1,122,237		685,333	346,068
Revenue from gas detection products
NET REVENUES
Net revenues	23,967		19,533	68,599
Other revenues
NET REVENUES
Net revenues	5,663		1,200	¥ 847
Engineering design, development and validation service
NET REVENUES
Net revenues	43,101		14,026
Extended warranties
NET REVENUES
Net revenues	¥ 7,702		¥ 676

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

NET REVENUES - Revenues disaggregated by geographic location (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
NET REVENUES
Net revenues	¥ 1,202,670	$ 174,371	¥ 720,768	¥ 415,514
Mainland China
NET REVENUES
Net revenues	697,294		269,634	185,516
North America
NET REVENUES
Net revenues	358,549		352,981	201,194
Europe
NET REVENUES
Net revenues	86,153		67,912	16,589
Other regions
NET REVENUES
Net revenues	¥ 60,674		¥ 30,241	¥ 12,215

- Definition

+ References

+ Details

NET REVENUES - Accounts receivable and contract balances (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Accounts receivable
Opening Balance	¥ 85,821		¥ 56,319	¥ 36,511
Increase(decrease), net	399,223		29,502	19,808
Ending Balance	485,044	$ 70,325	85,821	56,319
Contract assets
Opening Balance	146,537		38,337
Increase(decrease), net	(133,937)		108,200	38,337
Ending Balance	12,600	1,827	146,537	38,337
Contract liabilities
Opening Balance	122,603		9,357	11,843
Increase(decrease), net	(82,225)		113,246	(2,486)
Ending Balance	40,378	$ 5,854	122,603	9,357
Contract liabilities, revenue recognized	¥ 109,120		¥ 8,048	¥ 11,843

INCOME TAXES (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
INCOME TAXES (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Enterprise income tax	0.02%	0.45%	0.19%
Retained earnings	¥ 0	¥ 0	¥ 0
United States
INCOME TAXES
Applicable income tax rate	27.98%	27.98%
PRC
INCOME TAXES
Enterprise income tax	25.00%
Preferential tax rate	15.00%	15.00%	15.00%
HNTE status review period	3 years
Percentage of tax deductible expenses engaged in R&D activities			175.00%
Percentage of tax deductible expenses engaged in manufacturing business		200.00%
Percentage of withholding tax on foreign investors, non-resident enterprises	10.00%

INCOME TAXES - Current and deferred portion (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
INCOME TAXES
Current tax expenses	¥ 2
Over-provision in prior year			¥ (1,057)	¥ (125)
Deferred tax benefits	(68)		(58)	(74)
Income tax (benefits) expenses	¥ (66)	$ (10)	¥ (1,115)	¥ (199)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAXES - Net Loss before income tax (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Net loss before income tax from PRC operations	¥ (251,302)	¥ (92,498)	¥ (104,524)
Net loss before income tax from non-PRC operations	(49,529)	(153,444)	(2,891)
Total net loss before income tax	¥ (300,831)	¥ (245,942)	¥ (107,415)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INCOME TAXES - Reconciliation between the effective income tax rate and statutory income tax rate (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Statutory income tax rate	25.00%	25.00%	25.00%
Effect of different tax rate of different jurisdictions	(3.09%)	(4.39%)	0.10%
Non-deductible expenses	(6.12%)	(17.98%)	(0.30%)
Effect of super deduction on R&D expenses	41.00%	34.83%	38.83%
Effect of change of valuation allowance	(56.77%)	(37.44%)	(63.56%)
Over provision for prior years		0.43%	0.12%
Income tax expenses	0.02%	0.45%	0.19%

INCOME TAXES - Deferred tax assets and deferred tax liabilities (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets
Net operating loss carry forwards	¥ 373,215	¥ 220,480
Deductible temporary differences	31,348	11,562
Deferred revenue	6,294	9,443
Less: valuation allowance	(410,857)	(241,485)	¥ (136,269)	¥ (67,985)
Deferred tax liabilities
Identifiable intangible assets from business combination.	439	466
Total deferred tax liabilities	¥ 439	¥ 466

INCOME TAXES - Movement of valuation allowance (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAXES
Balance at beginning of the year	¥ 241,485	¥ 136,269	¥ 67,985
Addition	169,372	105,216	68,284
Total	410,857	241,485	136,269
Net operating loss carry forwards	¥ 1,492,808	¥ 881,256	¥ 476,996

SHARE-BASED COMPENSATION (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
SHARE-BASED COMPENSATION
Options outstanding	9,608,634	9,173,623	0
Advances from employee	¥ 4,962	¥ 5,581
Unrecognized share-based compensation expense	¥ 324,359

SHARE-BASED COMPENSATION - Assumptions used to estimate the fair values of the share options granted (Details) - 2022 Option Incentive Plan	12 Months Ended
	Dec. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares
SHARE-BASED COMPENSATION
Expected volatility, minimum	74.00%	48.00%
Expected volatility, maximum	80.00%	74.00%
Risk-free interest rate, minimum (per annum)	1.94%	0.97%
Risk-free interest rate, maximum (per annum)	3.83%	1.55%
Expected dividend yield	0.00%	0.00%
Employee forfeiture rate (per annum)		3.80%
Exercise multiples	2.50	2.50
Expected term	7 years	7 years
Minimum
SHARE-BASED COMPENSATION
Employee forfeiture rate (per annum)	3.80%
Fair value of underlying ordinary share (per share)	$ 18.11	$ 14.10
Fair value of awards on valuation date	$ 12.93	5.84
Maximum
SHARE-BASED COMPENSATION
Employee forfeiture rate (per annum)	3.92%
Fair value of underlying ordinary share (per share)	$ 19.91	18.42
Fair value of awards on valuation date	$ 17.11	$ 16.90

SHARE-BASED COMPENSATION - 2020 Plan (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2020	Dec. 31, 2022
SHARE-BASED COMPENSATION
Unrecognized share-based compensation expense		¥ 324,359
2020 Option Incentive Plan \| Employees
SHARE-BASED COMPENSATION
Number of options authorized for grant	5,054,138
Number of options granted		5,054,138
Exercise price		¥ 3.25
Contractual life	5 years
2020 Option Incentive Plan \| Employees \| Vested at the latter of the first anniversary
SHARE-BASED COMPENSATION
Vesting percentage		33.33%
2020 Option Incentive Plan \| Employees \| Remaining vested at each of the 12 months from the First Vesting Date
SHARE-BASED COMPENSATION
Vesting percentage		66.67%

SHARE-BASED COMPENSATION - 2021 Plan (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2021 shares	Dec. 31, 2022 USD ($)	Dec. 31, 2021 shares	Jun. 30, 2021 shares	Jan. 01, 2021 shares
SHARE-BASED COMPENSATION
Number of share options canceled	312,051		312,051
2021 Share Incentive Plan
SHARE-BASED COMPENSATION
Number of shares authorized for issuance				16,365,047
2017 Replacement
SHARE-BASED COMPENSATION
Number of shares outstanding					14,710,802
Number of shares repurchased			136,269
Minimum service period required for not to exercise the right to repurchase of equity interest		5 years
Required service period and prior to qualified IPO for not to exercise the right to repurchase of equity interest		5 years
Fixed annual rate of return on termination of employment in the required service period		8.00%
Incremental fair value after replacement \| $		$ 0
2017 Replacement \| 2021 Reorganization
SHARE-BASED COMPENSATION
Number of shares replaced with options			14,574,533
Options to purchase shares of common stock on replacement			4,048,536
Replacement ratio for shares			3.6
2020 Replacement
SHARE-BASED COMPENSATION
Number of options outstanding					5,054,138
Number of shares forfeited			118,079
2020 Replacement \| 2021 Reorganization
SHARE-BASED COMPENSATION
Number of shares replaced with options			4,936,059
Options to purchase shares of common stock on replacement			1,371,141
Replacement ratio for shares			3.6

SHARE-BASED COMPENSATION - Option awards to new incentive recipients (Details)	1 Months Ended	3 Months Ended	12 Months Ended
	May 31, 2022 $ / shares shares	Mar. 31, 2021 shares	Dec. 31, 2022 ¥ / shares shares	Dec. 31, 2021 shares
SHARE-BASED COMPENSATION
Weighted average exercise price \| ¥ / shares			¥ 12.51
Vested and expect to vest (in years)			5 years 10 months 17 days
Vested and expect to vest \| ¥ / shares			¥ 19.66
Option awards to new incentive recipients
SHARE-BASED COMPENSATION
Number of options granted			1,158,201	4,286,828
Option awards to new incentive recipients \| Senior executive and employees
SHARE-BASED COMPENSATION
Number of options granted				4,286,828
Option awards to new incentive recipients \| Senior executive and employees \| On 2,000,000 share options
SHARE-BASED COMPENSATION
Vesting term				4 years
Number of shares vest per quarter		125,000
Maximum number of shares grantee may early exercise and accelerate				500,000
Option awards to new incentive recipients \| Senior executive and employees \| On 26,743 share options
SHARE-BASED COMPENSATION
Number of options granted				26,743
Option awards to new incentive recipients \| Senior executive and employees \| On 26,743 share options \| First portion
SHARE-BASED COMPENSATION
Vesting percentage				33.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 26,743 share options \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage				33.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 26,743 share options \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage				34.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 2,248,185 share options
SHARE-BASED COMPENSATION
Number of options granted				2,248,185
Option awards to new incentive recipients \| Senior executive and employees \| On 2,248,185 share options \| First portion
SHARE-BASED COMPENSATION
Vesting percentage				25.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 2,248,185 share options \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage				25.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 2,248,185 share options \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage				25.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 2,248,185 share options \| Fourth portion
SHARE-BASED COMPENSATION
Vesting percentage				25.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 11,900 share options
SHARE-BASED COMPENSATION
Number of options granted				11,900
Option awards to new incentive recipients \| Senior executive and employees \| On 11,900 share options \| First portion
SHARE-BASED COMPENSATION
Vesting percentage				33.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 11,900 share options \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage				33.00%
Option awards to new incentive recipients \| Senior executive and employees \| On 11,900 share options \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage				34.00%
Option Awards To New Incentive Recipients 2022 New Grant
SHARE-BASED COMPENSATION
Vesting percentage	25.00%
Number of options award	60,000
Weighted average exercise price \| $ / shares	$ 18.65
Vested and expect to vest (in years)	4 years
Vested and expect to vest \| $ / shares	$ 8
Option Awards To New Incentive Recipients 2022 New Grant \| On 115806 share option \| First portion
SHARE-BASED COMPENSATION
Vesting percentage			33.00%
Option Awards To New Incentive Recipients 2022 New Grant \| On 115806 share option \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage			33.00%
Option Awards To New Incentive Recipients 2022 New Grant \| On 115806 share option \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage			34.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees
SHARE-BASED COMPENSATION
Number of options granted			1,158,201
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 115806 share option
SHARE-BASED COMPENSATION
Number of options granted			115,806
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,007,458 share option
SHARE-BASED COMPENSATION
Number of options granted			1,007,458
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,007,458 share option \| First portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,007,458 share option \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,007,458 share option \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,007,458 share option \| Fourth portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 12,300 share option
SHARE-BASED COMPENSATION
Number of options granted			12,300
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 12,300 share option \| First portion
SHARE-BASED COMPENSATION
Vesting percentage			33.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 12,300 share option \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage			33.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 12,300 share option \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage			34.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 1,189 share option
SHARE-BASED COMPENSATION
Number of options granted			1,189
Vesting percentage			100.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 21,448 share option
SHARE-BASED COMPENSATION
Number of options granted			21,448
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 21,448 share option \| First portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 21,448 share option \| Second portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 21,448 share option \| Third portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%
Option Awards To New Incentive Recipients 2022 New Grant \| Employees \| On 21,448 share option \| Fourth portion
SHARE-BASED COMPENSATION
Vesting percentage			25.00%

SHARE-BASED COMPENSATION - Option activity (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2020 ¥ / shares
Number of options
Options outstanding, Beginning \| shares		9,173,623	9,173,623	0	0
Forfeited \| shares		723,190	723,190	220,831	220,831
Cancelled \| shares	312,051			312,051	312,051
Options outstanding, Ending \| shares	9,173,623	9,608,634	9,608,634	9,173,623	9,173,623	0
Vested and expected to vest at ending \| shares		5,088,920
Exercisable at ending \| shares		1,794,795
Weighted average exercise price
At the beginning (in dollars per share)		¥ 9.23		¥ 0
Forfeited (in dollars per share)		13.85		5.96
Cancelled (in dollars per share)				0.90
Outstanding at ending (in dollars per share)	¥ 9.23	12.51		9.23			¥ 0
Vested and expect to vest		19.66
Weighted average exercise price		12.51
Weighted average grant date fair value
At the beginning		56.58
Weighted average grant-date fair value		121.62		102.74			62.21
Outstanding at ending	¥ 56.58	65.93		¥ 56.58
Vested and expected to vest at ending		101.08
Exercisable at ending		¥ 65.93
Weighted average remaining contract life and Aggregate intrinsic value
Outstanding		5 years 5 months 15 days	5 years 5 months 15 days	6 years 3 months 25 days	6 years 3 months 25 days
Vested and expect to vest (in years)		5 years 10 months 17 days	5 years 10 months 17 days
Exercisable at ending		5 years 5 months 15 days	5 years 5 months 15 days
Outstanding \| ¥	¥ 1,005,546	¥ 1,141,255		¥ 1,005,546
Vested and expected to vest at ending \| ¥		568,013
Exercisable at ending \| ¥		213,122
Unrecognized share-based compensation expense \| ¥		¥ 324,359
Unrecognized stock compensation expense, expected to be recognized over a weighted-average period		2 years 7 months 17 days	2 years 7 months 17 days
Weighted average grant-date fair value		¥ 121.62		¥ 102.74			¥ 62.21
Options exercised \| $			$ 0		$ 0	$ 0
Share-based compensation expenses related to share options without IPO condition \| ¥		¥ 104,750		¥ 54,283
Replacement
Number of options
Number of options granted \| shares				5,419,677	5,419,677
Weighted average exercise price
Granted (in dollars per share)				¥ 3.87
Weighted average grant date fair value
Weighted average grant-date fair value				22.83
Weighted average remaining contract life and Aggregate intrinsic value
Unrecognized share-based compensation expense \| ¥		¥ 103,318
Unrecognized stock compensation expense, expected to be recognized over a weighted-average period		2 years 1 month 6 days	2 years 1 month 6 days
Weighted average grant-date fair value				¥ 22.83
Option awards to new incentive recipients
Number of options
Number of options granted \| shares		1,158,201	1,158,201	4,286,828	4,286,828
Weighted average exercise price
Granted (in dollars per share)		¥ 33.92		¥ 15.25
Weighted average grant date fair value
Weighted average grant-date fair value		121.62		102.74
Weighted average remaining contract life and Aggregate intrinsic value
Weighted average grant-date fair value		¥ 121.62		¥ 102.74

RELATED PARTY TRANSACTIONS (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
RELATED PARTY TRANSACTIONS
Revenues from related parties	¥ 0	¥ 15,655	¥ 41,765
Research and development expenses			900
Purchases			83
Affiliates
RELATED PARTY TRANSACTIONS
Revenues from related parties		¥ 15,655	41,765
Equity method investee
RELATED PARTY TRANSACTIONS
Research and development expenses			900
Purchases			¥ 83

- Definition

+ References

+ Details

RELATED PARTY TRANSACTIONS - Balances (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
RELATED PARTY TRANSACTIONS
Amounts due from related parties, net of allowance			¥ 28,088
Amounts due to related parties	¥ 334,283	¥ 307,498
Affiliates
RELATED PARTY TRANSACTIONS
Amounts due from related parties, net of allowance			¥ 28,088
Founding Shareholders and certain shareholders
RELATED PARTY TRANSACTIONS
Amounts due to related parties	¥ 334,283	¥ 307,498

- Definition

For an unclassified balance sheet, amounts due from related parties including affiliates, employees, joint ventures, officers and stockholders, immediate families thereof, and pension funds.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 1
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+ Details

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties.

+ References

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LOSS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2021 CNY (¥)	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Numerator
Net loss		¥ (300,765)	$ (43,606)	¥ (244,827)	¥ (107,216)
Deemed dividend	¥ (2,131,572)	(446,419)	(64,725)	(2,211,330)
Net loss attributable to ordinary shareholders		¥ (747,184)	$ (108,331)	¥ (2,456,157)	¥ (107,216)
Denominator
Weighted average number of ordinary shares outstanding, basic		115,534,593	115,534,593	104,987,478	89,895,471
Weighted average number of ordinary shares outstanding, diluted		115,534,593	115,534,593	104,987,478	89,895,471
Net loss per share, basic \| (per share)		¥ (6.47)	$ (0.94)	¥ (23.39)	¥ (1.19)
Net loss per share, diluted \| (per share)		¥ (6.47)	$ (0.94)	¥ (23.39)	¥ (1.19)

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The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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LOSS PER SHARE - Anti-dilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share options
LOSS PER SHARE
Shares issuable upon exercise of share options	9,608,634	9,173,623	5,490,261

SEGMENT (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
SEGMENT (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥) segment	Dec. 31, 2022 USD ($) segment	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
SEGMENT
Number of operating segments \| segment	2	2
Net revenues	¥ 1,202,670	$ 174,371	¥ 720,768	¥ 415,514
Segment profit	471,987	$ 68,432	381,796	238,914
LiDAR segment \| Operating segments
SEGMENT
Net revenues	1,178,703		701,235	346,915
Cost of revenues	720,300		330,769	155,986
Segment profit	458,403		370,466	190,929
Gas detection segment \| Operating segments
SEGMENT
Net revenues	23,967		19,533	68,599
Cost of revenues	10,383		8,203	20,614
Segment profit	¥ 13,584		¥ 11,330	¥ 47,985

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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SEGMENT - Reportable segments (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
SEGMENT
Total profit	¥ 471,987	$ 68,432	¥ 381,796	¥ 238,914
Sales and marketing expenses	(104,835)	(15,200)	(69,266)	(49,904)
General and administrative expenses	(201,007)	(29,143)	(236,713)	(76,553)
Research and development expenses	(555,179)	(80,493)	(368,435)	(229,653)
Other operating income, net	10,817	1,568	27,333	15,384
Interest income	58,734	8,516	32,584	20,925
Foreign exchange (loss) gain	20,858	3,024	(13,275)	(25,696)
Other (loss) income, net	(2,161)	(313)	118	(828)
Net loss before income tax and share of loss in equity method investments	(300,786)	$ (43,609)	(245,858)	(107,411)
Reportable segments
SEGMENT
Total profit	471,987		381,796	238,914
Sales and marketing expenses	(104,835)		(69,266)	(49,904)
General and administrative expenses	(201,007)		(236,713)	(76,553)
Research and development expenses	(555,179)		(368,435)	(229,653)
Other operating income, net	10,817		27,333	15,384
Interest income	58,734		32,584	20,925
Foreign exchange (loss) gain	20,858		(13,275)	(25,696)
Other (loss) income, net	(2,161)		118	(828)
Net loss before income tax and share of loss in equity method investments	¥ (300,786)		¥ (245,858)	¥ (107,411)

SEGMENT - Long-term assets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
SEGMENT
Total Long-term assets	¥ 679,862	¥ 435,958
Mainland China
SEGMENT
Total Long-term assets	665,511	432,528
North America
SEGMENT
Total Long-term assets	¥ 14,351	¥ 3,430

EMPLOYEE BENEFIT (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
EMPLOYEE BENEFIT (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
EMPLOYEE BENEFIT
Contribution for employee benefits	¥ 82,877	¥ 50,648	¥ 15,732

STATUTORY RESERVES AND RESTRICTED NET ASSETS - (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
STATUTORY RESERVES AND RESTRICTED NET ASSETS
Required minimum percentage of annual appropriations	10.00%
Statutory threshold percentage of the reserve fund to the registered capital of the respective company, above which the appropriation is not required	50.00%
Statutory reserves \| $		$ 0	$ 0
Restricted net assets \| ¥	¥ 3,334,624

COMMITMENTS AND CONTINGENCIES - Capital expenditure commitments (Details) ¥ in Thousands	Dec. 31, 2022 CNY (¥)
Future minimum capital payment under non-cancellable agreements
2023	¥ 314,793
2024	11,675
Total	¥ 326,468

COMMITMENTS AND CONTINGENCIES - Royalty commitments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES
Base payment for royalty	$ 3,000
2030
COMMITMENTS AND CONTINGENCIES
Payment for royalty expense	3,000
Base payment for royalty	$ 300
Net revenues of rotational scanning product from US$0 to US$425,000
COMMITMENTS AND CONTINGENCIES
Percentage of royalty on net revenue	4.00%
Net revenues of rotational scanning product from US$0 to US$425,000 \| Minimum
COMMITMENTS AND CONTINGENCIES
Net revenues of rotational scanning product	$ 0
Net revenues of rotational scanning product from US$0 to US$425,000 \| Maximum
COMMITMENTS AND CONTINGENCIES
Net revenues of rotational scanning product	$ 425,000
Net revenues of rotational scanning product from US$425,000 to US$2,925,000
COMMITMENTS AND CONTINGENCIES
Percentage of royalty on net revenue	3.00%
Net revenues of rotational scanning product from US$425,000 to US$2,925,000 \| Minimum
COMMITMENTS AND CONTINGENCIES
Net revenues of rotational scanning product	$ 425,000
Net revenues of rotational scanning product from US$425,000 to US$2,925,000 \| Maximum
COMMITMENTS AND CONTINGENCIES
Net revenues of rotational scanning product	$ 2,925,000
Net revenues of rotational scanning product from US$2,925,000 to above
COMMITMENTS AND CONTINGENCIES
Percentage of royalty on net revenue	2.00%
Net revenues of rotational scanning product	$ 2,925,000

COMMITMENTS AND CONTINGENCIES - Standby credit facility (Details) - CNY (¥) ¥ in Thousands		1 Months Ended
	Nov. 18, 2022	Nov. 30, 2022
COMMITMENTS AND CONTINGENCIES
Credit facility agreement		¥ 300,000
Term of borrowings (in years)	2 years	1 year

- Definition

The carrying value as of the balance sheet date of the noncurrent portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

ADDITIONAL INFORMATION OF THE PARENT COMPANY - CONDENSED BALANCE SHEETS (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
ASSETS
Cash and cash equivalents	¥ 913,277	$ 132,413	¥ 449,352
Prepayments and other current assets	126,452	18,333	89,119
Property and equipment, net	504,953	73,211	321,627
TOTAL ASSETS	3,839,396	556,660	3,952,369
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued expenses and other current liabilities	356,502	51,689	370,854
TOTAL LIABILITIES	997,663	144,648	902,548
MEZZANINE EQUITY
MEZZANINE EQUITY	5,986,910	868,020	5,540,491
Shareholders' deficit
Subscription receivables	(310,227)	(44,979)	(310,227)
Accumulated other comprehensive income (loss)	(3,608)	(523)	8,465
Accumulated deficit	(2,831,381)	(410,512)	(2,188,947)
Total shareholders' deficit	(3,145,177)	(456,008)	(2,490,670)	¥ 1,137,193	¥ (169,427)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	3,839,396	556,660	3,952,369
Class A
Shareholders' deficit
Ordinary shares	19	3	19
Class B
Shareholders' deficit
Ordinary shares	20	3	20
Parent company \| Reportable legal entities
ASSETS
Cash and cash equivalents	35,411	5,134	36,160
Prepayments and other current assets	1,041	151	496
Investments in subsidiaries	2,806,201	406,860	3,037,606
Property and equipment, net	7	1
TOTAL ASSETS	2,842,660	412,146	3,074,262
LIABILITIES AND SHAREHOLDERS' EQUITY
Amounts due to subsidiaries			272
Accrued expenses and other current liabilities	927	134	24,169
TOTAL LIABILITIES	927	134	24,441
MEZZANINE EQUITY
MEZZANINE EQUITY	5,986,910	868,020	5,540,491
Shareholders' deficit
Subscription receivables	(310,227)	(44,979)	(310,227)
Accumulated other comprehensive income (loss)	(3,608)	(523)	8,465
Accumulated deficit	(2,831,381)	(410,512)	(2,188,947)
Total shareholders' deficit	(3,145,177)	(456,008)	(2,490,670)
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT	2,842,660	412,146	3,074,262
Parent company \| Reportable legal entities \| Class A
Shareholders' deficit
Ordinary shares	19	3	19
Parent company \| Reportable legal entities \| Class B
Shareholders' deficit
Ordinary shares	¥ 20	$ 3	¥ 20

ADDITIONAL INFORMATION OF THE PARENT COMPANY - CONDENSED BALANCE SHEETS (Parenthetical) (Details) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Redeemable shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Redeemable shares, issued	54,551,513	54,551,513
Redeemable shares, outstanding	54,551,513	54,551,513
Class A
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, authorized	35,000,000	35,000,000
Ordinary shares, issued	30,033,379	30,033,379
Ordinary shares, outstanding	30,033,379	30,033,379
Class B
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, authorized	150,000,000	150,000,000
Ordinary shares, issued	30,949,701	30,949,701
Ordinary shares, outstanding	30,949,701	30,949,701
Parent company \| Reportable legal entities
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Redeemable shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Redeemable shares, issued	54,551,513	54,551,513
Redeemable shares, outstanding	54,551,513	54,551,513
Parent company \| Reportable legal entities \| Class A
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, authorized	35,000,000	35,000,000
Ordinary shares, issued	30,033,379	30,033,379
Ordinary shares, outstanding	30,033,379	30,033,379
Parent company \| Reportable legal entities \| Class B
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Ordinary shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Ordinary shares, authorized	150,000,000	150,000,000
Ordinary shares, issued	30,949,701	30,949,701
Ordinary shares, outstanding	30,949,701	30,949,701

ADDITIONAL INFORMATION OF THE PARENT COMPANY - CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Net revenues	¥ 1,202,670	$ 174,371	¥ 720,768	¥ 415,514
General and administrative expenses	(201,007)	(29,143)	(236,713)	(76,553)
Foreign exchange (loss) gain	20,858	3,024	(13,275)	(25,696)
Other income, net	(2,161)	(313)	118	(828)
Equity in deficit of subsidiaries	(45)	(7)	(84)	(4)
Net Loss	(300,765)	(43,606)	(244,827)	(107,216)
Net loss attributable to ordinary shareholders	(747,184)	(108,331)	(2,456,157)	(107,216)
Comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(12,073)	(1,750)	9,083	(1,950)
Comprehensive loss	(312,838)	(45,356)	(235,744)	(109,166)
Parent company \| Reportable legal entities
ADDITIONAL INFORMATION OF THE PARENT COMPANY
General and administrative expenses	(37,105)	(5,379)	(146,838)
Foreign exchange (loss) gain	2		(2,324)
Other income, net			34
Equity in deficit of subsidiaries	(263,662)	(38,227)	(95,699)	(107,216)
Net Loss	(300,765)	(43,606)	(244,827)	(107,216)
Deemed dividend	(446,419)	(64,725)	(2,211,330)
Net loss attributable to ordinary shareholders	(747,184)	(108,331)	(2,456,157)	(107,216)
Comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(12,073)	(1,750)	9,083	(1,950)
Comprehensive loss	¥ (312,838)	$ (45,356)	¥ (235,744)	¥ (109,166)

ADDITIONAL INFORMATION OF THE PARENT COMPANY - CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 USD ($)
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Other comprehensive income (loss), tax \| $		$ 0		$ 0		$ 0
Parent company \| Reportable legal entities
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Other comprehensive income (loss), tax \| ¥	¥ 0		¥ 0		¥ 0

ADDITIONAL INFORMATION OF THE PARENT COMPANY - CONDENSED STATEMENTS OF CASH FLOWS (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Cash flows from operating activities:
Net loss	¥ (300,765)	$ (43,606)	¥ (244,827)	¥ (107,216)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	53,634	7,776	28,231	19,215
Loss from equity in earnings of subsidiaries	45	7	84	4
Share-based compensation	105,219	15,255	54,283
Foreign exchange loss (gain), net	(20,858)	(3,024)	13,275	25,696
Changes in operating assets and liabilities:
Prepayments and other current assets	(33,556)	(4,865)	(48,618)	(8,790)
Amounts due from related parties			24,788	(20,842)
Accrued expenses and other current liabilities	(41,074)	(5,955)	170,125	(143,526)
Net cash used in operating activities	(696,015)	(100,914)	(228,386)	(352,015)
Cash flows from investing activities:
Purchases of property and equipment	(231,210)	(33,523)	(220,096)	(66,000)
Net cash used in investing activities	1,119,646	162,332	(1,980,237)	179,027
Cash flows from financing activities:
Cash contribution from shareholders in connection with the 2021 Reorganization			507,620
Proceeds from issuance of convertible loans			1,950,338
Cash consideration			453,978
Net cash provided by financing activities	15,176	2,200	2,403,726	323,437
Net increase (decrease) in cash and cash equivalents	438,807	63,618	195,103	150,449
Cash and cash equivalents, beginning of the year	449,352	65,150	256,688	112,737
Effect of foreign exchange rate changes on cash and cash equivalents	25,118	3,645	(2,439)	(6,498)
Cash and cash equivalents, end of the year	913,277	132,413	449,352	256,688
Supplemental disclosure of non-cash financing activities:
Accrued purchases of property and equipment	102,181	14,815	114,446	3,823
Accrued offering cost	480	70
Parent company \| Reportable legal entities
Cash flows from operating activities:
Net loss	(300,765)	(43,606)	(244,827)	(107,216)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2
Loss from equity in earnings of subsidiaries	263,662	38,227	95,699	¥ 107,216
Share-based compensation	33,342	4,834	35,056
Foreign exchange loss (gain), net	(2)		2,324
Changes in operating assets and liabilities:
Prepayments and other current assets	(545)	(79)	(496)
Amounts due from related parties			(255)
Accrued expenses and other current liabilities	2,611	379	24,746
Net cash used in operating activities	(1,695)	(245)	(87,753)
Cash flows from investing activities:
Purchases of property and equipment	(10)	(2)
Investments in subsidiaries			(2,787,570)
Net cash used in investing activities	(10)	(2)	(2,787,570)
Cash flows from financing activities:
Cash contribution from shareholders in connection with the 2021 Reorganization			507,620
Proceeds from issuance of convertible loans			1,950,338
Cash consideration			453,978
Net cash provided by financing activities			2,911,936
Net increase (decrease) in cash and cash equivalents	(1,705)	(247)	36,613
Cash and cash equivalents, beginning of the year	36,160	5,243
Effect of foreign exchange rate changes on cash and cash equivalents	956	138	(453)
Cash and cash equivalents, end of the year	35,411	5,134	36,160
Supplemental disclosure of non-cash financing activities:
Accrued purchases of property and equipment			¥ 1,950,338
Accrued offering cost	¥ 480	$ 70

ADDITIONAL INFORMATION OF THE PARENT COMPANY - NOTES (Details)	Dec. 31, 2022
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Exchange rate used for translations of balances	6.8972
Parent company \| Reportable legal entities
ADDITIONAL INFORMATION OF THE PARENT COMPANY
Exchange rate used for translations of balances	6.8972