Pony AI: Bold stock market entry with Toyota's support

Chinese company Pony AI, which focuses on developing autonomous vehicles, is planning its debut on the US stock market. The move follows the relaxation of Chinese regulations on foreign capital raising and brings a new impetus to the autonomous technology market. Backed by strategic investor, Japanese automotive giant Toyota, Pony AI is entering the next phase of its development.

Key points:

- Toyota as a major investor: Toyota owns a 13.4% stake in Pony AI and has invested $400 million in 2020. Toyota is actively involved in the development of autonomous vehicle technology through its partnership with Pony AI.

- Fleet of robotic vehicles: The company operates 190 robotic vehicles in Beijing and Guangzhou and another 250 vehicles in Shenzhen and Shanghai. This fleet has completed more than 20 million autonomous rides, including 2.4 million completely without a human driver.

- Profits vs. costs: Despite revenue growth to $24.7 million in the first half of 2024, the company is still reporting losses due to the high cost of developing and operating autonomous vehicles.

Growing market and revenue diversification

- Robotaxi: Pony AI offers an average of 15 rides per day per vehicle to the more than 220,000 registered users of the PonyPilot app. This service generates a significant portion of the company's revenue.

- Robotic trucks: The autonomous truck segment contributed a total of 73% to the company's revenue in the first half of 2024, with three key customers accounting for the majority of this revenue.

Challenges on the road to profitability

Autonomous technologies are expensive and Pony AI faces high investments in research, development and operations. Despite year-over-year revenue growth, the company has lowered its IPO expectations:

- Minimum IPO valuation: Adjusted to $4 billion.

- Target for raising capital: Reduced from $425 million to $200 million.

In addition, the company expects costs associated with operations and technology development to continue to increase.

Pony AI and competition

In the autonomous vehicle space, Pony AI competes with other Chinese technology startups such as WeRide a Zeekrwho are also looking to expand into international markets. However, support from Toyota and other major investors gives Pony AI a competitive advantage in access to technology and financial resources.

The future of Pony AI

A stock market listing could allow the company to raise capital for further expansion and development. Its strategic focus on robotaxis and autonomous trucking reflects the growing global interest in autonomous mobility.

Despite financial losses, Pony AI represents an interesting investment opportunity due to:

- Support from Toyota,

- its leading position in the Chinese autonomous vehicle market,

- expanding its fleet of robotaxi and autonomous trucks.

However, the company has a long way to go to achieve profitability, which will depend on its ability to optimise costs and further expand its service portfolio.