Pony.ai and WeRide, two prominent players in the autonomous driving sector, marked a challenging beginning as they began trading in Hong Kong. On Thursday, shares of Pony.ai fell over 12%, while WeRide saw a decline of nearly 8%. Both companies, which are already listed on U.S. exchanges, successfully raised substantial capital through their initial public offerings in Hong Kong—Pony.ai at 6.71 billion Hong Kong dollars (approximately $860 million) and WeRide at HK$2.39 billion.
These fundraising efforts are a response to the rapidly evolving landscape of autonomous technologies, with both companies vying for market share against larger rivals like Baidu’s Apollo Go in China and Alphabet’s Waymo in the U.S. The raised funds are earmarked for scaling their operations and advancing the development of Level 4 autonomous driving—a standard that signifies a vehicle’s capability to drive itself without human oversight under designated conditions.
Tony Xu Han, CEO of WeRide, shared with CNBC that the financial contributions from the IPO would also enhance the company’s artificial intelligence capabilities and expand its data center operations. Their ambition extends beyond Chinese borders as they explore international markets including the Middle East, Europe, and various Asian nations such as Singapore. However, they face hurdles in obtaining the full regulatory approvals necessary to deploy their fully autonomous robotaxis in these new regions.
In the United States, both companies are exploring a potential partnership with Uber, aiming to integrate their robotaxis into Uber’s ride-hailing platform, contingent upon receiving regulatory green lights. However, a recent U.S. government rule has effectively barred Chinese technology from connected vehicles, adding layers of complexity to their plans.
Industry analyst Tu Le noted that the recent market uncertainties and the hurdles faced by businesses like Pony.ai and WeRide in entering the U.S. market underscore the strategic motive behind their Hong Kong dual listing. Le characterized this move as a risk mitigation strategy, emphasizing the necessity for substantial investment and accomplishments in markets outside the U.S. for future success.
In preceding U.S. trading, Pony.ai’s shares declined by approximately 2%, while WeRide’s stock fell by 5.3%. The competing listings of Pony.ai and WeRide reflect a broader trend among Chinese firms opting for dual listings in Hong Kong, particularly as this year has seen a resurgence in the city’s IPO market. The approval for their dual listings was secured in mid-October.
Having clustering listings simultaneously bolsters Hong Kong’s reputation as a technology hub for Asia-focused firms, according to Rolf Bulk, an equity research analyst at New Street Research. Earlier, Chinese technology giant CATL had achieved a secondary listing in Hong Kong, raising a staggering $5.2 billion.
The dual listings also unfold against a backdrop of geopolitical tensions and regulatory challenges in the U.S. While these moves may enhance access to Asia-based capital and solidify their foothold in the region, Bulk remarked that it might not advance their technological capabilities or hasten regulatory approvals in Western markets. In fact, it may complicate their efforts in securing necessary approvals in these regions.
As Pony.ai and WeRide strive to keep pace with competitors like Baidu and Waymo, the focus remains on their potential partnerships, particularly with Uber, and how their technology evolves alongside emerging advancements in artificial intelligence. Market observers are urged to pay attention to these developments as the situation unfolds.
