Pony.ai, WeRide tumble after splashy Hong Kong IPO debuts

Shares of Pony.ai and WeRide both dropped hard on Thursday after their big-ticket IPOs in Hong Kong, according to data from CNBC.

Pony.ai tumbled more than 12% and WeRide slid close to 13% right after trading began. This sharp fall came even though both self-driving firms raised serious money; HK$6.71 billion (about $860 million) for Pony.ai, and HK$2.39 billion for WeRide.

Both companies are already listed in the U.S., but they chased a dual listing to pull in more capital, expand in Asia, and reduce risk as U.S. regulators tighten their grip on Chinese tech. It didn’t help.

Before the Hong Kong debut, shares were already falling in New York. On Wednesday, WeRide dropped 5.2% and Pony.ai fell 2%. That’s not what you want before you open trading in a second market.

The damage isn’t just market-related. There’s pressure from all directions. The companies are running behind major players like Baidu’s Apollo Go in China and Waymo in the U.S.

Both firms are focused on building Level 4 autonomous driving systems, meaning the vehicle can operate without human input in some areas. That’s where this new cash is supposed to go.

Pony.ai and WeRide face pressure from regulators, rivals, and each other

James Peng, the CEO of Pony.ai, said the funds will be used to grow infrastructure, including charging and parking systems designed for self-driving vehicles, as well as for pushing more into AI development.

Over at WeRide, CEO Tony Xu Han told CNBC they’ll invest in AI capability and data center expansion to support their tech. Both bosses claim that safety is still the top goal, especially as they start operating robotaxis in a few Chinese cities.

They aren’t stopping in China either. Both are trying to enter new territories like Singapore, Europe, and parts of the Middle East, but the process is slow. They haven’t gotten full approval to run robotaxis in those places yet.

On top of that, there’s a fight brewing between the two rivals. WeRide CFO Li Xuan recently accused Pony.ai of misleading investors by underreporting how many cities WeRide currently operates in. The claim hit right before the IPO and stirred up even more controversy.

They’re also eyeing a potential link-up with Uber in the U.S., hoping to run robotaxis on the ride-hailing app once they get the green light from regulators. But that approval may never come.

Earlier this year, U.S. officials finalized a rule that blocks Chinese tech from being used in connected vehicles, which includes self-driving cars. That puts both companies at a disadvantage, no matter how polished their tech might be.

Tu Le, managing director of Sino Auto Insights, told CNBC that with global uncertainty and pressure in the U.S., going public in Hong Kong is a way to lower the risks and keep raising cash.

He said, “A dual listing is a lot about risk mitigation,” and added that Pony.ai and WeRide need serious capital and support from outside the U.S. to stay in the game.

Hong Kong plays a bigger role in funding China’s autonomous future

The dual listings also reflect a wider shift among Chinese tech firms. Hong Kong’s stock exchange gave the go-ahead in mid-October, and the move fits a rising pattern.

In May, CATL, a major battery firm, pulled off a massive $5.2 billion secondary listing, still the biggest IPO in the world this year.

Rolf Bulk, an equity analyst at New Street Research, said dual listings like these help shape Hong Kong as the go-to place for Asia’s tech players. But he also made it clear it won’t help these companies win over Western regulators.

“If anything, gaining approval in Western markets may be more challenging with a HK secondary listing,” he said.

Still, Le believes Pony.ai and WeRide remain in the global race. He said, “WeRide has diversified their service portfolio a bit more but they both see Uber and the Middle East as two viable partners in their ability to get more pilots launched outside of China.”

The issue now is whether they can keep up with the rapid pace of AI evolution, with Le adding, “Investors should pay special attention to how their technology evolves with AI and other new tools becoming more mainstream.”

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