Pony AI Inc. American Depositary Shares Q2 FY2025 earnings call

• Mass Production of Gen-7 Robotaxi: First 2 models (GAC and BAIC) entered mass production in June and July respectively. Over 200 vehicles produced, on track for 1,000+ by year-end. BOM cost reduced 70% from previous generation. Operated Gen-7 in all 4 Tier 1 cities in China with over 2 million km of open road autonomous driving.
• Service Expansion and User Reach: Registered users surged 136% YOY in Q2. Secured Shanghai's first fully driverless commercial license. Expanded globally to Dubai, Seoul, Luxembourg.
• Financial Results: Total revenues surged 76% YOY. Robotaxi revenues more than doubled, fare charging revenues grew over 300%.

In the second quarter, total revenues were USD 21.5 million, growing 76% year-over-year. Robotaxi service revenues reached USD 1.5 million, up 158% year-over-year, with fare charging revenues growing over 300%. Robotruck services revenues were USD 9.5 million, down 10% year-over-year. Licensing and application revenues were USD 10.4 million, surging 902% year-over-year. Robotaxi services contributed significantly to the revenue growth, with fare charging revenues being a key driver.

• On track to reach 1,000+ Gen-7 Robotaxi by year-end 2025. - Confident in achieving positive unit economics for Gen-7 Robotaxi due to cost reductions in areas like remote assistance and vehicle insurance, and improved operations.

• Regulatory challenges in new markets regarding safety standards and deployment. - Dependence on successful scaling of mass production and commercial deployment across different geographies.

Q: Could you share more thoughts on your production plan throughout the second half of 2025?

A: James Peng mentioned ramping up production, retooling assembly lines for BAIC and GAC Gen-7 models, being on track for 1,000+ vehicles by year-end, and confidence in achieving positive unit economics due to cost reductions and improved operations.

Q: Your robotaxi revenue growth was very strong once again this quarter. Can you elaborate the key drivers behind the solid growth?

A: Leo Wang stated it was driven by expanding user adoption, demand in Tier 1 cities, increased deployed fleet, and optimization of pricing and operational strategies across user segments.

Q: Currently, China's Ministry of Public Security commented on the intelligent driving systems and autonomous driving. What does this mean for the full Robotaxi industry?

A: Tiancheng Lou explained the distinction between L2 and L4 systems, benefits for Pony AI in clarifying the difference to the public, and the need for high safety standards and redundancy in L4 systems for fully driverless permits.

Q: As we look at new market expansion, what are the key technical requirements to enter new geographies? And how confident are you in your system's ability to adapt quickly and safely to different environments?

A: Tiancheng Lou noted the core of L4 auto driving is handling corner cases, and their point cloud model enables rapid adaptation and replication across different environments, as seen in Shanghai's WAIC operation.

Q: We've seen news reports about potential Hong Kong IPO plans of the company. Do you have any timetable that you can share for now for such IPO?

A: Leo Wang stated they do not comment on market speculation, but are monitoring market conditions and exploring capital market opportunities to maximize shareholders' value.

Q: Could you please elaborate more on your future plan to expand your Robotaxi business in the overseas market?

A: James Peng discussed focus on markets with hyper growth potential, deep collaboration with local partners and policymakers. Leo Wang added that scaling full driverless Robotaxis requires strong local policy support, technology cost competitiveness, and user adoption, and it takes time for a sustainable fare-charging business model to mature in overseas regions.