Pony AI Inc. (NASDAQ: PONY) chief technology officer Lou Tiancheng says the robotaxi technology company has effectively lowered its manufacturing costs by a whopping 70%.
Tiancheng made the revelation in an interview with the Wall Street Journal today, adding that the Guangzhou headquartered firm, which is often touted as Chinese Waymo, is now on track for profitability.
The key is software optimization. For example, our software performance has tripled under the same computing power.
Pony AI stock rallied more than 50% this morning as the CTO’s remarks reassured investors about the company’s financial health.
Why else is Pony AI stock rallying today?
Pony AI shares are seeing massive upward momentum at writing also because the company unveiled three new self-driving vehicles co-developed with China’s GAC and BAIC Motor at the Shanghai Auto Show last week.
Plus, investors are still cheering PONY’s recent team-up with Beijing’s tech giant, Tencent, that will soon enable users to book a robotaxi from within the world-renowned WeChat app.
These recent developments are expected to help the robotaxi specialist reaccelerate revenue growth, after a 29.8% year-on-year decline to $35.5 million in its fiscal Q4.
Note that Pony AI stock has well over doubled in recent sessions, but is still down more than 50% versus its year-to-date high in late February.
How soon can Pony AI turn a profit?
According to Wall Street analysts, Pony AI has trimmed the bill-of-materials (BOM) tied to its robotaxis from north of $137,000 to about $41,000 only.
Cheaper production, they’re convinced, could help this China-based startup achieve the much-anticipated single-unit breakeven by the end of this year.
But turning a profit may be a whole other story.
On average, analysts believe it will take PONY until the end of this decade at least to hit that milestone.
And Pony AI shares do not pay a dividend to incentivise sticking with them in the meantime.
Is it worth buying Pony AI shares in 2025?
For those currently invested in Pony AI stock, the massive surge in recent sessions offers an opportunity to take profit, as escalating Sino-US trade tensions could hurt PONY significantly moving forward.
Pony AI’s chief executive, James Peng, sees expansion into the US as critical for PONY’s future growth.
But the White House could end up shutting doors on Pony in response to China’s retaliatory tariffs on American goods.
Peng himself acknowledged in an interview last week that Pony AI Inc. is already exploring a secondary listing outside of the United States to be better prepared for headwinds that may emerge due to the US-China trade tensions in 2025.
That said, Wall Street currently has a consensus “buy” rating on Pony AI stock with the mean target of about $20, indicating potential for a close to 100% upside from here.
The post Pony AI stock: 3 reasons why it surged 50% on Monday appeared first on Invezz
