Pony AI Speeds Past Competitors, Commercializes Fully Driverless Vehicles

Shares of autonomous driving technology leader Pony AI Inc PONY debuted on Nasdaq in November.

The Fremont, California-based company has the largest fleet of Level 4 autonomous mobility, offering robotaxi and robotruck services across China, according to Goldman Sachs.

Analyst Allen Chang initiated coverage of Pony AI with a Buy rating and a price target of $19.60.

The Pony AI Thesis: The company is the first to operate completely driverless robotaxis in four tier-1 cities in China, having obtained regulatory permits for providing robotaxi services to the general public, Chang said in the initiation note.

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While competition is a concern, it will take time for other companies to develop a vehicle that does not need any safety drivers to offer a better riding experience to passengers versus traditional taxis, the analyst stated.

"Besides, it also takes time to accumulate autonomous driving mileage / track record to earn the operation license from governments," he added.

"Pony AI continues to make progress on robotaxi commercialization, and we expect a revenue CAGR of 27% in 2024-27E on ramp up of its robotaxi fleet operation and start of licenses fee contribution from robotaxi solutions, then a 158% CAGR over 2027-30E with accelerated scale expansion, driving EBITDA and NI to turn positive in 2030E," Chang further wrote.

Price Action: Shares of Pony AI had risen by 4.48% to $13.75 at the time of publication on Monday.

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