Introduction | Lead

Recently, Pony.ai rang the Nasdaq bell, marking a significant milestone for the eight-year-old autonomous driving startup. While Pony.ai's IPO signifies the accelerating commercialization of autonomous driving in China, does the outlook for Robotaxi truly appear optimistic?

Produced by | Heyan Yueche Studio

Written by | Cai Jialun

Edited by | Heyan

Total words: 1714

Reading time: 3 minutes

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Autonomous driving has emerged as the hottest topic in the automotive industry this year, from Tesla's unveiling of Robotaxi at its conference to Pony.ai's Robotaxi IPO. Autonomous vehicles are no longer confined to science fiction movies but are on the brink of practical application. Since the beginning of this year, multiple autonomous driving companies, including Horizon Robotics, WeRide, and RoboSense, have successfully gone public. With advancements in new energy technology, artificial intelligence, and in-vehicle chips, autonomous driving is poised to become a pivotal arena in the automotive sector.

△Pony.ai rings the bell on Nasdaq

Pony.ai Emerges as a Leading Autonomous Driving Company

The story of Pony.ai's inception is quite remarkable. Founders Lou Tiancheng and Peng Jun, both graduates of Tsinghua University and veterans of Baidu's autonomous driving team, founded Pony.ai in 2016 with a vision for the future. They were early adopters, initially focusing on L4 autonomous driving technology and predicting that Robotaxi would be the ultimate model for autonomous driving commercialization. While other companies were still grappling with L2 and L3 technologies, Pony.ai had already assembled a team of top talents to tackle L4 challenges.

Despite a challenging development journey, Pony.ai was fortunate to attract the industry's most talented autonomous driving professionals. Backed by investment giants like Sequoia China, CPE Source Peak, and IDG Capital, Pony.ai forged a strategic partnership with Toyota in 2019. In 2022, it became the first autonomous driving company in China to obtain licenses for driverless ride-hailing services in Beijing, Shanghai, Guangzhou, and Shenzhen. By 2023, it had achieved true driverless Robotaxi operations, officially commencing its commercialization journey. Overcoming numerous obstacles, Pony.ai's three-year IPO preparation journey has instilled confidence for its future endeavors. As a star in the autonomous driving field, Pony.ai faces an improving market environment but also stiff competition.

△Pony.ai partners with Toyota

Competition in Robotaxi Will Intensify in the Future

In the domestic autonomous driving sector, Robotaxi currently represents the most promising avenue for large-scale commercialization. Although Pony.ai launched China's first Robotaxi service in 2018, its service scope remains limited to four major first-tier cities. In contrast, Baidu's Luobo Kuaipao operates in 11 cities, giving Pony.ai no numerical advantage in terms of city coverage. Many companies are now eyeing the vast Robotaxi market, with WeRide, DeepRoute.ai, Andi Technology, and Ruqi Chuxing growing rapidly with the support of major internet companies and automakers.

The competition between the Chinese and American automotive industries has also spilled over into the autonomous driving sector. Tesla's unveiling of its Robotaxi in October caused a stir, with Elon Musk's charismatic leadership once again capturing global attention. Although Pony.ai, as an early entrant and star enterprise, hasn't made significant breakthroughs in recent years, the pace of innovation remains crucial. With Tesla disrupting the market and major automakers ramping up R&D, Pony.ai may need to accelerate its efforts.

△Tesla's Robotaxi model Cybercab attracts attention

How Far Can Pony.ai Go?

As more companies enter the autonomous driving arena, Pony.ai, a veteran in the field, hasn't always enjoyed smooth sailing. On its IPO debut, Pony.ai's stock price opened high but closed low, drawing industry attention. Although the stock initially surged 21.1% to $15.74 from the issue price of $13 per share, it later fell, closing at $12, an 8% drop on the first day, raising concerns. Fortunately, Pony.ai's stock price has stabilized recently, closing at $13.04 on Friday.

Known for its rapid cash burn, Pony.ai incurred losses of $148 million in 2020, $125 million in 2023, and $93.9 million in the first three quarters of 2024. However, its net losses are gradually narrowing, a common trend among intelligent driving companies. Currently, Pony.ai faces a significant challenge: its U.S. listing may lead to issues with data protection and cybersecurity. Especially if the number of users exceeds 1 million, it may face scrutiny from Chinese regulators. Additionally, foreign restrictions on AI and autonomous driving technology are tightening. While Pony.ai has achieved its dream of going public, many challenges lie ahead.

△Pony.ai still faces loss challenges

Commentary

Although Pony.ai is celebrated as a "unicorn" among L4 autonomous driving companies, venturing into the volatile Robotaxi sector means it will continue to face numerous challenges and difficulties. General Motors recently halted its Robotaxi business after investing over 70 billion yuan, highlighting the bumpy road ahead. How to quickly achieve profitability is a pressing issue for Pony.ai post-IPO.

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