Pony.ai and WeRide Crash After High-Profile Hong Kong IPO Launches

Autonomous vehicle stocks hit the brakes hard following their much-hyped market debut.

Market Reality Check

Investors dumped shares as the autonomous driving companies failed to maintain their initial momentum. The post-IPO plunge serves as another reminder that flashy presentations don't always translate to sustainable valuations.

Hong Kong's tech sector takes another blow as these self-driving pioneers struggle to navigate public market expectations. Because nothing says 'innovation' like watching your investment drive off a cliff.

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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