Pony AI stock price: Chinese Waymo rival is up a staggering 55% today. Here are 3 possible reasons why

Chinese robotaxi technology company Pony AI Inc. (Nasdaq: PONY) was up a whopping 55% on Monday—yes, you read that right—after Chief Technology Officer Lou Tiancheng told the Wall Street Journal it can now build its autonomous driving system for 70% less and is on the road to profitability.

Pony AI makes the technology that allows cars to become autonomous, or self-driving, not the cars itself, but is partnering with companies that do. It also operates a fleet of robotaxis in China.

Last week, Pony AI unveiled three new driver-less vehicles at the Shanghai Auto Show, which were co-developed with Chinese state-owned automakers BAIC Motor and Guangzhou Automobile Group, as well as, Toyota.

Analysts estimate the company has slashed its bill-of-materials, or BOM, (all the materials, components, sub-assemblies, and instructions needed to manufacture a product) costs for its robotaxis from $137,217 to a $41,165.

Cheaper production could enable Pony AI to achieve single-unit breakeven, the point it makes a profit each time a new robotaxi is added to its fleet, according to the WSJ. Some analysts think they could reach that coveted goal by the end of 2025, but that the company wouldn’t likely turn a profit until at least 2030 when it hits 50,000 robotaxis.

“The key is software optimization,” Lou told the WSJ. “For example, our software performance has tripled under the same computing power.”

It’s worth noting, Pony AI, which focuses on developing and deploying autonomous driving technology, including robotaxi services, has yet to turn a profit and, in fact, posted a loss last quarter, it first reporting since going public last year.

If all goes well, Pony plans to to start production of its robotaxis mid-year, with the goal of expand from 300 vehicles to from 1,000 at the end of 2025, per the WSJ.

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