Bank of America Initiates Coverage on Pony AI

Bank of America has initiated coverage of Pony AI with a “buy” rating and a price objective of $18, indicating a 37% upside. Similarly, Goldman Sachs has also started coverage with a “buy” rating and a price target of $19.60.

Company Overview

Pony AI, a China-based autonomous mobility company founded in 2016, currently operates 250 robotaxis and 190 robotrucks. The company aims to achieve profitability by 2029, leveraging economies of scale and technological advancements.

Fleet Expansion Forecast

• Robotaxi Fleet: Expected to expand to 68,000 units by 2029, with unit gross profit projected to increase from RMB 25,000 in 2026 to RMB 70,000 by 2029.
• Robotruck Fleet: Anticipated to grow to 6,300 units by 2030, with gross profit turning positive after 2025.

Revenue Growth Expectations

Goldman Sachs reports that Pony AI is making significant progress in the commercialization of its robotaxi services. They forecast a 27% compound annual growth rate in revenue from 2024-2027, driven by the ramp-up of robotaxi operations and licensing fees from robotaxi solutions. Between 2027-2030, revenue growth is expected to be 158% as scale expands.

Strategic Positioning

Pony AI’s Virtual Driver technology, supportive policies from the Chinese government, and partnerships with automakers and logistics firms provide a solid foundation for scaling and monetization.