Pony AI’s stock is experiencing significant activity once again. The small-cap Chinese company, which specializes in robotaxis and robotrucks, witnessed more than a 30% increase yesterday after announcing the development of three new robotaxi models in collaboration with Beijing Automotive, Guangzhou Automobile, and Toyota Motor. The stock continued to rise this morning, showing an additional 27.6% increase by 10:25 a.m. ET.
The latest rise in Pony’s stock can still be largely attributed to the announcement made the previous day. However, there is another recent development contributing to this uptick. Reports from The Fly indicate that Pony AI has partnered with Hesai Group to procure AT128 lidar sensors, which are intended to enhance the visibility of its new robotaxis. Consequently, Hesai’s stock is also benefiting, showing a 6.1% increase.
Regarding the significance of these developments, the recent announcement may not carry as much weight for Pony AI as the stock’s price suggests; however, it is certainly positive news for Hesai. The notable advancements for Pony AI include the company reaching the seventh iteration of its autonomous driving system, possessing an automotive-grade autonomous driving kit (which could potentially be licensed to other automakers for additional revenue), and reducing the cost of producing this kit by 70%. Additionally, having a partnership with Toyota, the world’s largest automaker by sales, remains a significant advantage.
Despite these positive elements, Pony AI has yet to achieve profitability. The company generated $75 million in revenue over the past year but reported a loss of $274 million and continues to deplete its cash reserves. Pony AI currently holds approximately $745 million in cash, which might suffice to sustain its operations until it becomes self-sufficient with its internal free cash flow. However, Wall Street analysts foresee this happening no sooner than 2029. Thus, Pony AI remains a speculative investment. Potential investors are advised to consider purchasing in small amounts and to refrain from further investment until the company’s long-term viability is more assured.
