$13 million in revenue, $43 million net loss, and a shot to dominate the $3 trillion autonomous vehicle market – Pony AI (NASDAQ: PONY) just went public, and the stakes couldn’t be higher. The government supports the company and is racing to the top with its Level 4 autonomy technology.
The question is, can Pony AI challenge those who are sitting in the driver’s seat of the AV market – or is it just another overhyped tech player?
What is Pony AI?
Pony AI was launched in 2016 when two ex-engineers from Baidu and Google decided to tackle self-driving cars, and somehow, they managed to take it off the ground. Fast forward to today, the car company is operating three types of self-driving vehicles: robotaxis, delivery trucks, and, of course, personal cars for daily use.
Pony’s cars are considered “level 4” autonomous. In perspective, level zero is your regular car with no autonomous features or self-driving functions. On the other hand, level 5 would be fully self-driving, meaning no human intervention is required.
To generate more capital, the company went public in November 2024 with ambitious plans. One of its most significant goals is to have 1,000 robotaxis on the roads by the end of 2025.
Financial Health Check
Pony’s revenue for the 1st quarter of 2025 came in at around $13.98 million – that’s around a 11.6% increase compared to the 1st quarter of 2024.
The revenue for the 4th quarter of 2024 was approximately $35.5 million, indicating that the revenue for this quarter is around 60% less than the previous one. The good news, however, is that the company managed to narrow down its net losses. First, in the first quarter of 2025, the net loss was approximately $43 million, which is better than the net loss of around $181 million in the previous quarter.
The loss is primarily driven by the overall increase in research and development expenses, so it’s as if the company is bleeding cash for nothing. And to be fair, Pony AI is a relatively new company, so I don’t think investors should expect an overall-positive number at this point.
As for the stock, it is currently trading around $ 11.80. However, since the IPO, the stock has traded between $4.11 and nearly $24, which means the current price is approximately 44% below its all-time high.
The stock price nearly doubled from the listing price of $13 per share shortly after its IPO.
However, the honeymoon didn’t last long. Pony stocks came down crashing after Donald Trump’s tariffs were announced, and the stock dropped by around 80% from its peak. The tariff issues affected even the most prominent companies.
As a result, the stock recovered and even returned to around $20 as geopolitical issues subsided.
Bullish Scenario
After days of researching Pony AI, I found 3 significant prospects that, I think, investors should be aware of.
7th-Gen Robototaxi System
First, the company recently announced its 7th-generation robotaxi system, featuring a reported 70% reduction in bill-of-materials costs compared to its predecessors. Specifically, computing costs have decreased by 80%, and LiDAR expenses have declined by 70% as well. And this is important because almost every autonomous vehicle company is currently bleeding cash, mainly because the hardware needed to develop these cars is prohibitively expensive. This change is starting to be reflected in the company’s revenue. Although it’s growing from a small base, Pony’s Fare-change revenue for the first quarter increased by 800% year-over-year.
Pony AI’s deal with Uber
The next prospect is Pony’s partnership deal with Uber, intending to launch in the Middle East later this year. For Pony, this partnership solves their most significant problem outside China. With this, they wouldn’t need to build their own ride-hailing network from scratch, which means more savings and growth potential for Pony. However, Uber has been signing deals left and right with AV companies. I think this is Uber’s way of catching up with Lyft and Tesla in the Robotaxi market. I mean, it looks like Uber is partnering with as many AV companies as it can, because they can’t afford to be left behind if one of them succeeds.
This partnership is a double-edged sword. The real catalyst is Pony’s tech. If it’s good enough to win the majority of those rides, it’ll be huge for the company. Otherwise, it won’t get the most out of this partnership.
China’s Regulatory Advantage
Right now, the company is operating commercially in most major Chinese cities and is supported by its government in an unprecedented way. In perspective, Waymo is still operating in limited areas of the United States, mainly due to strict regulatory issues. Pony has even launched a paid service at Beijing South Railway Station, which is one of Asia’s busiest transportation hubs. This headstart directly translated to revenue. Robotaxi services increased by 200% year-over-year to around $1.73 million – it’s modest, but that’s just the beginning.
You see, China’s cities like Beijing, Shanghai, Guangzhou, and Shenzhen are some of the world’s largest markets for ride-hailing services, and Pony has the ‘early-bird’ advantage with actual paying customers, not just test riders. The approval to commercially operate within these cities is a massive advantage for Pony, especially now that their technology continues to scale and costs continue to drop.
Risks to Consider
Now, we can’t have an analysis without talking about the risks.
Yes, I said Pony’s got some advantage over Waymo, but hear me out.
Even if Pony AI has great technology, it might not be able to produce enough vehicles to compete. The 1,000 robotaxis target by the end of 2025 is impressive, until you realize that’s barely enough to one major city, especially in those bustling Chinese cities. Even if it reaches 700 to 1000 in major markets and produces around 1500 per year, it still won’t be able to catch up with Waymo as it already operates at that scale.
Additionally, Tesla is preparing for mass manufacturing in the robotaxi market, and it’s worth noting that Google backs Waymo. These two giants can flood the Robotaxi market while Pony is still trying to get their first thousand cars on the road.
Final Thoughts
Personally, Pony AI isn’t the type of company that I’d bet the farm on, but that’s just because I’m a conservative investor.
Even so, investors need diversification and a certain level of risk capital, and with Pony’s current stock price and market positioning, I think it could be a suitable addition to a long-term portfolio.
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