BREAKINGVIEWS-China's robotaxi races are getting hairy

By Katrina Hamlin

HONG KONG, Nov 26 (Reuters Breakingviews) - China's robotaxi races are kicking off. Pony AI PONY.O, 2026.HK and WeRide's WRD.O, 0800.HK results show the pair are commercialising driverless cabs. Yet shares have sunk since they raised more than $1 billion between them in Hong Kong listings earlier this month. Electric-car maker Xpeng's 9868.HK plan to enter the competition piles on pressure to move faster.

Robotaxi revenue at WeRide, which develops autonomous vehicles ranging from road sweepers to cabs, rose 761% to $5 million in the three months to the end of September from a year earlier, the company said on Monday. A day later, peer Pony AI posted a 72% jump in total sales over the same period.

The numbers are modest but show the business model for driverless cabs emerging. Pony noted that in Guangzhou its driverless taxis already achieve “unit economics breakeven”: on a per-vehicle basis it pockets a profit after deducting operational costs like charging and insurance from daily revenue. The companies are also growing fleets and areas of operation.

Yet shares are still down since the pair, which both went public in New York last year, added Hong Kong listings on November 6. At their lowest, Pony had shed 31%, while WeRide was 23% lower. Results helped, but fell short of driving a full recovery.

That’s understandable. On the eve of the listings, $20 billion Xpeng declared plans to pilot robotaxis as soon as next year. The company, which sold nearly 200,000 cars in 2024, has already developed proprietary assisted-driving systems and collaborates with Volkswagen VOWG.DE on smart cars. Pony AI and WeRide are not yet familiar names to consumers, whereas Xpeng’s strong brand can help persuade passengers to step into a driverless cab. Its manufacturing base and a decision to focus on vision-only autonomous driving – without additional lidar sensors – mean its costs may be lower, too.

True, there is a high barrier to entry. This week’s earnings demonstrate Pony and WeRide have a decent headstart, not only in China, but even overseas – WeRide has permits in eight countries. Partnerships like Pony’s collaboration with Toyota Motor 7203.T help too. But neither is expected to report a net profit until at least 2028 according to analysts polled by LSEG, while Xpeng could reach this landmark next year. The latter also has a $6.7 billion cash pile to help it play catchup, as of June, while Pony and WeRide each have less than a $1 billion on hand.

China’s tech pioneers often confront extreme competition; for robotaxis, that rite of passage could arrive early.

Follow Katrina Hamlin on Bluesky and LinkedIn.

CONTEXT NEWS

Robotaxi company Pony AI's net loss widened to $62 million in the quarter to the end of September from $42 million a year earlier, results published on November 25 showed. Revenue rose 72% to $25 million over the same period.

Autonomous driving group WeRide's net loss fell to 307 million yuan ($43 million) in the same time frame, from 1 billion yuan a year earlier, the company said on November 24. Revenue rose 144% to 171 million yuan.

WeRide's U.S.-listed shares jumped 15% on November 24 following the results release. Pony AI's U.S.-listed shares closed up 5.9% on November 25.