Pony AI (PONY), a rival to Tesla’s (TSLA) autonomous vehicle technology, saw its stock surge last week as investors responded positively to the approval of its exclusive robotaxi route in Guangzhou, China. Pony AI announced that it has launched paid robotaxi services between several locations in Guangzhou, expecting strong demand for this route. Year-to-date, PONY stock has gained 64.5%, with a 32% jump on Friday following the announcement.
Pony AI competes with Tesla in China’s self-driving market. While Tesla focuses on full self-driving (FSD) technology, Pony AI operates robotaxi services, directly challenging Tesla.
Pony AI’s Robotaxi Expansion
Taking the lead in the autonomous driving market, Pony AI is expanding its services in cities like Guangzhou and Beijing. Pony AI has reached a major milestone by becoming the first company to provide paid robotaxi services linking Guangzhou’s city center to key transport hubs, including Guangzhou Baiyun International Airport and Guangzhou South Railway Station, both of which are among the busiest in China.
Tesla Lags Behind in Autonomous Driving
On the other hand, Tesla is facing regulatory challenges in launching its full self-driving (FSD) technology in China. The company had previously stated that its FSD service is expected to launch in Europe and China in the first quarter of 2025, pending regulatory approvals. However, with the growing U.S.-China trade tensions, Tesla may face additional delays in securing Chinese approval for FSD.
FSD is a key part of Musk’s strategy to make Tesla more AI-focused and advance self-driving technology. Currently, Tesla offers Autopilot and Enhanced Autopilot services in China.
In addition, Tesla announced its driverless taxi, Cybercab, in October, with plans for it to roll off the assembly line in 2026.
Is Pony a Good Stock to Buy?
Pony AI has secured key approvals from Chinese regulators, positioning the company as a potential player in the autonomous vehicle market. If this trend continues, the stock may experience long-term growth.
On TipRanks, PONY stock has a Strong Buy consensus rating based on three Buy recommendations. The average share price target for Pony AI is $19.20, which implies a 18.7% downside potential from current levels.
