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Two of China’s biggest robotaxi start-ups fell as much as 15 per cent upon listing in Hong Kong on Thursday, as analysts raised concerns about profitability in an increasingly competitive sector.
Pony.ai and WeRide, which compete fiercely in China and are both backed by Uber, raised HK$6.7bn ($862mn) and HK$2.4bn respectively in their secondary offerings.
The two companies already trade on New York’s Nasdaq, but Chinese technology groups have considered listing closer to home on fears that US President Donald Trump’s administration might pursue delistings of Chinese companies.
Hong Kong has benefited from the dealmaking boom as mainland businesses seek capital in the city. But in contrast to CATL, the battery maker that surged 16 per cent upon listing, the robotaxi start-ups struggled to gain altitude, driven by concerns over profitability and an increasing number of entrants in the sector.
“Investors should be cautious and avoid overly optimistic expectations,” said Dickie Wong, a director at Hong Kong’s Institute of Securities Dealers, who attributed Thursday’s decline to the two stocks’ underperformance in the US.
Pony.ai’s US shares have risen 7 per cent since January, while WeRide’s have dropped 36 per cent, compared with a 22 per cent rise for the Nasdaq Composite.
Within China, the two companies compete with search engine giant Baidu’s Apollo Go. Chinese electric-vehicle maker Xpeng on Wednesday said it planned to launch three robotaxi models next year, with a starting price as low as Rmb200,000 ($28,000), compared with Pony.ai’s estimated $38,000 and WeRide’s $40,000.
Pony.ai’s net loss widened to $96.1mn from $51.3mn in the first half of the year. WeRide recorded a first-half net loss of Rmb791.5mn, from Rmb881.7mn a year earlier.
HSBC analysts said in a recent research note that profitability could be years away.
“Remote supervisors, parking, charging, cleaning and infrastructure costs, plus the incremental costs of technology and AI support are often overlooked,” analysts wrote. “When we factor in these costs, we believe robotaxis won’t be break-even on a cash flow basis until seven to eight years after launch.”
Globally, the companies are competing against Google parent Alphabet’s Waymo and Elon Musk’s Tesla. Uber in May agreed a deal with Pony.ai to launch services in the Middle East on the ride-hailing app this year.
Uber’s arrangement is one of more than 10 partnerships announced this year with robotaxi providers as the ride-hailing company faces pressure from Waymo in the US. Uber also has deals with Baidu and WeRide.
Pony.ai is testing autonomous vehicles in countries including the US, Luxembourg, the United Arab Emirates and South Korea. Its chief executive said it hoped to launch in Japan and potentially Australia in the next two to three years.
“In these regions, taxi fares are relatively high,” James Peng told the Financial Times ahead of Pony.ai’s Hong Kong listing, adding that other criteria for selecting new markets included a sizeable population, strong government support and reliable local partners.
“But regulatory frameworks in overseas markets are less developed compared to China,” said Peng, noting that the company had to carry out testing with a human driver in foreign markets, whereas the Chinese government has eased such rules in several cities.
“China and the US are the only two countries with comprehensive legislation governing [robotaxis],” he said.
WeRide is testing robotaxis in Singapore, Switzerland, Saudi Arabia and the UAE.
Uber is also in talks to participate in a spinout of Pony.ai’s US arm, led by the company’s co-founder and former chief executive Travis Kalanick, according to people familiar with the matter.
Uber declined to comment. Kalanick and Pony.ai did not respond to requests for comment on the talks.
The US commerce department this year issued a rule blocking autonomous vehicle software used in the country from being operated or maintained by “foreign adversaries”, namely China and Russia, and set a deadline of March 2026 to meet the rule.
Additional reporting by Tim Bradshaw in London
