With Tesla's (NASDAQ: TSLA) Robotaxi event and its third-quarter 2024 earnings presentation in the rearview mirror, investors now have some insights into the company's plan to expand its Robotaxi service in the coming years.
On the company's recent conference call, Elon Musk said that his target for Tesla achieving commercial production of robotaxis is 2026. Those bullish on the future of self-driving taxis but who are uninterested in hitching a ride with Tesla don't seem to have a lot of other investment options, though.
That may soon be changing, however. Chinese robotaxi start-up Pony.ai recently submitted a filing to hold an initial public offering (IPO) for American depositary shares.
Let's see what Pony.ai revealed in its filing, so robotaxi investors can better assess whether the company's IPO deserves a place on their radars.
Getting to know Pony.ai
With a fleet of more than 250 robotaxis, Pony.ai isn't a company that investors should dismiss as one selling pie-in-the-sky aspirations. Its autonomous vehicles are already taking passengers to and fro in four major Chinese cities: Beijing, Shanghai, Guangzhou, and Shenzhen.
And these operations aren't minor. According to the regulatory filing, Pony.ai has logged more than 2.4 million driverless miles with its fleet.
But thinking it's just a robotaxi operation would be unfair to the company. It also provides robotruck services to logistics providers, having logged about 3 million miles with this operation.
While its autonomous vehicles have a presence on Chinese roads, the company recognizes that it hasn't achieved wide-scale production either with its robotaxis or its robotrucks. That being said, investors may not have to wait long before production ramps up. In 2023, Pony.ai and Toyota(NYSE: TM) formed a joint venture that the companies say aims to "advance the future mass production and large-scale deployment of fully driverless robotaxis."
With sales growing, Pony.ai is driving toward profitability
With the company currently conducting business operations, prospective investors are certainly wondering about its financials. Pony.ai reports that it booked revenue of $68.4 million in 2022 and $71.9 million in 2023.
It seems that the company is steering toward growth in 2024 as well. Through the first six months of the year, it reported sales of $24.7 million, representing a 100% increase over the same period in 2023.
Although the company isn't profitable, it's heading in that direction. After reporting a net loss of $148.3 million in 2022, it reined in operating expenses, helping narrow its net loss to $125.3 million in 2023.
Its cash flow also suggests that the company is making progress: The negative $154.8 million in operating cash flow for 2022 was reduced to $115.4 million in 2023.
Should investors saddle up when it debuts on public markets?
Currently, Pony.ai appears to have a competitive advantage in the Chinese robotaxi market. According to research firm Frost & Sullivan, it is the only company specializing in autonomous driving that has received all the available permits required for providing public robotaxi services within the four cities listed above. This and the company's growing revenue and shrinking losses are certainly encouraging for prospective investors.
Despite these auspicious signs, only those with ample risk tolerance should consider parking Pony.ai stock in their portfolios if and when it debuts on the public markets. Plenty of questions remain as to whether the company will succeed in achieving wide-scale production of its robotaxis, and to what degree there will be customer demand.
Therefore, most investors would be better off at this point watching the story play out from the side of the road while considering some of the other options in self-driving cars.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
