China-based autonomous driving company Pony AI could see large-scale growth ahead for its robotaxis, making it a standout play in the rapidly advancing self-driving car industry, according to Deutsche Bank. Analyst Bin Wang initiated the stock with a buy rating and price target of $20, which implies roughly 33% upside. Pony AI debuted on the Nasdaq on Nov. 27 through an initial public offering. Since then, the stock is up just 6%. “Pony is a global leader in large-scale commercialization of autonomous mobility, mainly robotaxis,” Wang wrote in a note to clients, calling the company “Chinese Waymo” — referring to Alphabet’s self-driving car project. “The core of Pony’s intelligent-driving technology is proprietary software empowered by cutting-edge artificial intelligence (AI) technology,” Wang continued. “Due to its superior intelligent-driving technology, Pony is the only robotaxi technology company that has obtained all available regulatory permits in tier-1 cities in China.” PONY mountain 2024-11-27 PONY since Nov. 27 Pony operates fare-charging, entirely driverless robotaxis throughout China’s four tier-1 cities : Beijing, Shanghai, Guangzhou and Shenzhen. First-tier cities refer to the country’s most developed and wealthiest cities. The company also offers road-testing robotaxis in Shanghai. According to Wang, Pony’s robotaxi and robotruck businesses should take off and turn profitable before the end of the decade. He added that they will eventually comprise most of Pony’s revenue even though its top line over the past three years was primarily driven by its licensing and applications business. Pony’s efforts to scale and commercialize its fleet will also be supported by China’s leadership in robotics, the analyst noted. Wang said that robotaxis will “enjoy exponential growth” in China, a country that’s already seeing its nationwide robotaxi fleet size rapidly scale as commuters take the cars on ride-hailing platforms or apps from the robotaxi providers, like Pony’s own PonyPilot app. The analyst also expects the Chinese government’s endorsement of robotaxis to grow by introducing more operational areas and licenses for the vehicles and services, respectively. Looking ahead, Deutsche expects Pony’s robotaxi and robotruck businesses to collectively generate a rising share of the company’s total revenue, comprising about 58% in 2024 to roughly 97% by the end of 2030. In particular, the firm forecasts revenue from Pony’s robotaxi services business to grow at a whopping 171% compound annual growth rate, from $8.6 million in 2024 to $3.37 billion in 2030. That would increase its share of revenue, as a percentage of Pony’s total revenue, to about 93% by 2030.
