Pony AI Inc. American Depositary Shares (NASDAQ:PONY) Q4 2025 Earnings Call Transcript

Pony AI Inc. American Depositary Shares (NASDAQ:PONY) Q4 2025 Earnings Call Transcript March 26, 2026

Pony AI Inc. American Depositary Shares beats earnings expectations. Reported EPS is $0.01, expectations were $-0.11446.

Operator: Hello, ladies and gentlemen. Thank you for standing by, and welcome to Pony AI Inc. American Depositary Shares Fourth Quarter and Full Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. As a reminder, today’s conference call is being recorded, and a webcast replay will be available on the company’s Investor Relations website at ir.pony.ai under the News and Events section. I will now turn the call over to your host, George Shao, Head of Capital Markets and Investor Relations at Pony AI Inc. American Depositary Shares. Please go ahead, George.

George Shao: Thank you, operator, and hello, everyone. We appreciate you joining us today for Pony AI Inc. American Depositary Shares’ fourth quarter and full year 2025 earnings call. Earlier today, we issued a press release with our financial and operating results, which is available on our Investor Relations website, and an earnings presentation, which we will refer to during the conference call, can also be accessed and downloaded on our IR website. Joining me today on the call are Dr. James Peng, Chairman of the Board and CEO; Dr. Tiancheng Lou, CTO; and Dr. Liu Wang, CFO of the company. They will provide the prepared remarks followed by the Q&A session. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call as we will be making forward-looking statements.

Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release available on our Investor Relations website and filings with the SEC and Hong Kong Stock Exchange. I will now hand over to our Chairman and CEO, Dr. James Peng. Please go ahead.

James Peng: Thank you, George. Hello, everyone. Thank you for joining our earnings call. 2025 is an amazing year for us. This was defined by multiple remarkable milestones. First, our top-line growth significantly accelerated. Looking at Q4 last year, our robotaxi revenues surged 160% year-over-year and fare-charging revenues skyrocketed by over 500%. Second, since our Gen-7 robotaxis’ debut last April, we moved straight into mass production and commercial deployment. Our fleet has now surpassed 1,400 units. Third, we are expanding our footprint, launching services in new cities, in both China and globally. This has massively broadened our reach. In fact, we have now crossed the 1,000,000 user mark in China alone. Fourth, we have proven our business model actually works.

We achieved UE breakeven in both Guangzhou and Shenzhen, and we will replicate this success in more markets. Looking ahead at 2026, it will be a year of hypergrowth for Pony AI Inc. American Depositary Shares. We are riding a perfect wave of industry momentum built on five pillars: fully driverless technology, policy support, mass production, large-scale operation, and ecosystem maturity. Last year, we used China’s tier-one cities as a strategic blueprint to deploy Gen-7 robotaxis. From official debut to mass production, regulatory validation, and rigorous testing, we achieved commercially fully driverless operations within just six months. Last quarter, we set our robotaxis fleet target to over 3,000 units for this year. Bolstered by the financial firepower from our successful Hong Kong IPO, and also with Toyota bZ4X Gen-7 model already in SOP, we now have greater visibility and are confident in even exceeding this target.

Our excellent virtual driver is the key to support this confidence. Proven mastery of highly complex urban scenarios and a superior safety record have earned deep trust from policymakers and partners, driving rapid user adoption. This directly translates into positive UE. Since we hit UE breakeven in Shenzhen last month, growth momentum continues. This March, we are seeing peak daily revenues of RMB 394 per vehicle and daily orders at 25 per vehicle. We will certainly replicate this success globally. By year-end, we plan to deploy robotaxis in over 20 global cities. As the go-to partner, we have forged strategic alliances with industry leaders like Tencent and Uber. Together, we will propel global expansion, powering accelerated top-line growth and more than tripling our robotaxi revenues for 2026.

Let me elaborate on how we will drive this hypergrowth. We are executing a dual-engine strategy. That means we are all in on both China and global markets. Our proven business model in China gives us a solid foundation to replicate success internationally, and we are already seeing great results that position us for our next growth phase. In China, we have earned clear leadership across tier-one cities, scaling further and pushing deeper into busy downtown areas. Take Shenzhen, for example. Our robotaxis satisfied surging demand in traffic hubs such as Nanshan and Baoan during Chinese New Year. The paid orders in the first two months this year alone have already surpassed that of the whole year 2025 in Shenzhen. We also entered University Town in Guangzhou, the business campus zone in Southern China.

This sets the stage for more launches in multiple cities across the Greater Bay Area. In March, we also entered Hangzhou and Changsha, top tier-two cities. This is just the start, and we will have more cities to follow soon. Now turning to overseas markets. Our presence in Europe, the Middle East, East Asia, and Southeast Asia now covers a population of 100,000,000. We are aiming for nearly half of our 20-city target to come from overseas by the end of this year. Recently, we teamed up with Uber and Verne, which is a Rimac Group company, to enter Croatia, working together to launch Europe’s first commercial fare-charging robotaxi service. In the Middle East, we rolled out our first fare-charging service with Karwa in Doha, and we are gearing up for fully driverless operations after approval later this month in Dubai, UAE.

In Singapore, we have launched the public debut of autonomous driving services with ComfortDelGro. We are confident overseas revenues will grow rapidly in 2026. Ecosystem maturity is a critical pillar in executing our dual-engine strategy. Our successful business model makes us a go-to partner. Partners are now lining up to join our joint deployment model. Essentially, it is a model where they will fund the vehicles and we can share success together. This will empower us to achieve fleet acceleration, reduce cost, and improve capital efficiency. We have a robust pipeline of new partners ready to jump on board. Toyota is the first to adopt our joint deployment model. Their bZ4X Gen-7 robotaxis will account for a significant portion of our 3,000-vehicle target in 2026, and we have already secured 1,000 units.

As a long-standing strategic partner, our collaboration with Toyota extends far beyond just manufacturing. Together, we will commercially deploy robotaxis to drive market penetration by leveraging our OEM partners’ mature supply chain and extensive after-sales service networks. Our enhanced partnership with both Beijing Auto and Guangzhou Auto further reduces our vehicle cost. In addition, we will jointly deploy robotaxi vehicles into more overseas markets. To reach a broader user base, we also partnered with Tencent by integrating with WeChat Mobility, unlocking access to hundreds of millions of users to call our local taxi services. We are also deepening strategic partnerships with OnTime Mobility in Guangzhou and ATB in Beijing to accelerate adoption of our joint deployment model.

Overseas, our global partnership with Uber enables us to access users across multiple continents starting from Europe. Our regional alliances strengthen our market penetration with partnerships established with ride-hailing platform Bolt and also automaker Stellantis. Now let me turn to robotruck. Over the past few years, we made huge technological leaps by using our proven L4 tech stack. It has been translating into commercial breakthroughs. We are now covering major logistic routes connecting industrial hubs, ports, and consumption centers across China. To seize the opportunity, we introduced our Gen-4 robotruck in 2025, reducing the ADK BOM cost by 70%. We target mass production of Gen-4 robotrucks and deployment this year. In 2025, we have deployed fully driverless robotrucks at the Jiangmen Port in Guangdong Province and tested the 1+N driverless platooning in extreme weather conditions in Northwest China.

With this proven stack, we will deploy robotrucks in more ports and mine-haulage scenarios. Lastly, our licensing and applications business delivered robust growth. Last year, autonomous domain controllers (ADC) sales actually reached sixfold the level of 2024. We have also expanded our application scenarios to low-speed deliveries, robust sweepers, logistics, and humanoid robotics. Strong customer demand and growing market recognition of our technology will continue to drive growth. In summary, we have hit a major inflection point, as we validated our business model through 2025 achievements such as fleet expansion, new city launches, and UE breakeven. 2026 is poised as a year of hypergrowth. We are confident we will triple our robotaxi revenues, grow our fleet to over 3,000 vehicles, and deploy robotaxis in more than 20 global cities.

Powered by our dual-engine strategy, we are speeding towards autonomous mobility everywhere. I firmly believe every effort we make today will not only reshape the future of human mobility but also drive a revolution in transportation. This will be a revolution where safety, efficiency, and accessibility redefine how the world connects, commutes, and thrives. I will now turn the call over to our CTO, Dr. Tiancheng Lou, who will go over our technology strategies. Tiancheng, please go ahead.

Tiancheng Lou: Hello, everyone. Looking back at our journey in 2025, it was a landmark year. We proved the commercial viability of our robo-taxi, achieving positive unit economics in Guangzhou and Shenzhen. Today, our sites have surpassed 1,400, with large growth throughout the year. Robotaxi is the first commercial application of physical AI validated by real-world operations and user adoption. Overall, our amazing tech architecture, built on years of R&D, has earned the trust of policymakers and established first-mover advantage to capture multiyear growth. As highlighted in the previous quarter, world models are now the widely recognized tech path, a domain where we hold a firm leading position with the Pony world model. But technology is only the foundation.

The key to success is who can deliver reliable driverless robotic service at scale. I will walk you through how our technology drove commercial results in 2025 across three dimensions: scale, efficiency, and user experience. First, scale. Through strong execution on mass production, we surpassed our 2025 fleet target, and this momentum positions us to reach over 3,000 units by 2026. Since mid-2025, we began mass production of two Gen-7 models with Guangzhou Auto and Beijing Auto, both now ramping up to full capacity. In February, the bZ4X Gen-7 robotaxi co-developed with Toyota rolled off the production line. This strong generalization of our overall car-driving stack enables us to efficiently adapt across different vehicle platforms. This multi-OEM network enables rapid scaling while strengthening local partnerships and broadening our robotics vehicle offerings.

This scale is backed by a comprehensive ODD that validates our technology’s stability to generalize across diverse urban environments. Today, our fully driverless fleet operates 24/7 in many cities across the globe, serving the public during peak rush hours and severe weather conditions. Achieving this required rigorous engineering validation, and the breadth of our fleet and ODD reflects the maturity and robustness of our autonomous driving stack. Our overseas expansion further validates its generalization capability. In Zagreb, we are operating across a large area in the city’s urban core, handling complex urban traffic rather than limited low-complexity routes. Such ability to deploy in demanding environments from day one demonstrates both the relevance of our technology and the commercial potential of our global expansion.

This gives us strong confidence in reaching our target of more than 20 cities worldwide. Second, efficiency. We have established a clear cost advantage, driving a twofold improvement. On hardware, we optimized the design in Gen-7 robotaxis, effectively lowering BOM costs through adopting more cost-effective components. Our operations and safety record create significant leverage, dramatically reducing insurance fees and improving remote efficiency. Altogether this enables us to scale positive unit economics. Beyond that, our tech is building a powerful operation model. We have developed a highly generalized AI driving capability to build comprehensive and scalable operational workflows. This deep know-how makes us the go-to partner across the mobility ecosystem.

It perfectly positions us to execute our joint deployment model, allowing us to scale fleet much faster with better capital efficiency. Third, user experience. Our technology enables robotaxis to serve consistently in high-value, high-difficulty scenarios, exactly in high-frequency ride-sharing hotspots where demand peaks and users are willing to pay a premium. This differentiates our service, supports our pricing strategy, and directly drives UE improvement. For example, in Shenzhen, our 24/7 driverless robotaxi covers high-traffic urban zones such as the Nanshan high-tech area to fulfill daily commuting needs. During rush hours, our AI virtual driver navigates not only major main roads, but also narrow streets where commuters actually need to pick up and drop off, providing convenient portal coverage that truly addresses real-world commuting needs.

In Beijing, during a heavy snowstorm in early March, getting a ride became a major pain point for users, with long waiting times and limited availability. Despite the extreme conditions—snow-covered sensors, reduced visibility, and unpredictable road conditions all demanding significantly high driving capabilities—our robotaxis continued operations throughout the snowstorm, capturing substantial order volume growth during that period. Beyond handling extreme conditions, we have significantly improved ride comfort. Our Gen-7 robotaxi delivers smoother acceleration, braking, and signaling, significantly reducing motion sickness—a pain point that users care about most. This underscores the fundamental point: technology leadership is not just an engineering milestone; it is the core engine of our commercial success.

Outstanding user experience earns user preference and repeat usage organically without relying on discounts. Beyond the robotaxi business, our proven L4 technology enables us to capture commercial opportunities across the broader autonomous driving industry. Our platform’s generalization enables 80% of the tech stack to be shared between robotruck and robotaxi. We have achieved true full-scenario, all-weather, 24/7 operational capability. Our operations now span from complex highway segments to unique scenarios like port logistics, with cumulative mileage exceeding 60,000,000 kilometers. We also unlock synergy in the licensed application segment through leveraging our advanced autonomous driving domain controller design, capitalizing on the rapid growth trend in low-speed delivery, robust sweepers, logistics, and robotics.

We effectively fulfill our customers’ demand in robotics. Looking ahead to 2026, we will increase our investment in R&D and AI talent to strengthen our competitive position. Specifically, we are focused on advancing our Pony world model to further strengthen our top driving capabilities, reducing cost through continued hardware and software optimization, and improving operational efficiency to lower per-vehicle operating cost. These improvements are designed to fuel faster commercialization, expanding our robotaxi operations to more than 20 cities globally by year-end and delivering faster revenue growth. We will more than triple the robotaxi revenue versus 2025. As we have demonstrated already, technology leadership directly drives commercial performance, and this investment will further widen our advantage.

This concludes my prepared remarks. I will now pass the call over to our CFO, Dr. Liu Wang, for a closer look at our financial results. Liu, please go ahead.

Liu Wang: Thank you, Tiancheng. And hello, everyone. This is Liu. I will focus on year-over-year comparison for the fourth quarter unless otherwise noted. For full year 2025 and fourth quarter detailed financials, please refer to our earnings release. 2025 marked an inaugural year of large-scale commercialization for our robotaxi operations. The robotaxi segment continues to act as the core growth engine for the group, delivering exceptional top-line growth. In the fourth quarter, robotaxi revenues surged 160% to $6.7 million. For full year 2025, robotaxi revenues reached $16.6 million, growing 129%. This remarkable acceleration was primarily driven by our fare-charging service, where we saw Q4 fare-charging revenues skyrocket by 501% with a full-year growth rate of nearly 400%.

More importantly, within just four months of Gen-7 robotaxi launch, we are thrilled to see consecutive UE turn positive in both Guangzhou and Shenzhen, the two most valuable cities in China. This milestone was built on two unique pillars that are exceptionally difficult to replicate by others. First, our clear cost advantages in both vehicle and robotaxi operations. Second, our exceptional AI driving capabilities. Being capable of navigating highly complex urban environments 24/7, we deliver a consistent, reliable, and high-quality service which helped us capture robust user demand. With the foundation of positive UE, and as vehicle density improves, we are seeing a clear network effect. Improving fleet density shortens wait time, boosts utilization rates, and drives the number of orders per vehicle.

This in turn enhances overall passenger experience and further stimulates ride-hailing demand. Specifically, year-to-date of 2026, our users have nearly tripled year-over-year and reached 1,000,000. In February, we successfully delivered unit economics positive in Shenzhen, with an impressive average daily orders of 23 and RMB 338 average daily net revenue on a per-vehicle basis. As a matter of fact, this strong upward trend is continuing right now. In March, we hit a new daily peak of RMB 394 net revenue and 25 orders per vehicle. More excitingly, our paid orders in the first two months of 2026 in Shenzhen have already surpassed the entire order volume for the full year of 2025. Looking ahead, we remain highly confident in the growth trajectory of our robotaxi business.

As James mentioned, our dual-engine strategy will drive rapid expansion into more than 20 cities in China and overseas. We are confident that our robotaxi revenues will at least triple this year. Simultaneously, we are enhancing our revenue quality by adding high-margin recurring revenue streams through robotaxi joint deployment with our partners such as OnTime Mobility. This model will lower the CapEx requirement on initial fleet deployment from our end and also gives us leverage to expand faster and more efficiently into new regions. From a technology perspective, as Tiancheng mentioned, our advanced AI driver capability directly empowers a premium user experience, providing safe, reliable, smooth, and efficient rides for passengers. This superior experience strengthens our pricing power and deepens user mind share, which can further boost top-line growth.

On the cost side, we have proactively secured procurements for critical vehicle components and hardware, including high-demand memory modules. Therefore, we expect minimal impact from supply chain pricing fluctuation. Meanwhile, with greater fleet scale, continuous tech reiteration, and deepening OEM collaboration, we have high confidence in continuously reducing our vehicle BOM and further improving operating efficiency. Together, the high gross margin profile of the robotaxi segment is fundamentally elevating our revenue quality and actively contributing to the group’s future profitability. Now let us move on to robotruck. By leveraging our proven robotaxi stack, our next-gen robotruck achieves a 70% cost reduction. Furthermore, our transition to EV trucks will continue to drive down per-kilometer operating cost.

Looking ahead to 2026, our shared expertise in robotaxi will accelerate our robotruck mass production, enabling us to begin deployment within 2026, as we aggressively deepen our route coverage across major logistic corridors and expand into more scenarios such as dedicated lines and port operations. We expect to see accelerated growth in revenues beginning in 2025. We are seeing strong client demand for our autonomous domain controller (ADC) product, with the ADC volume growing to six times the level of 2024. Looking ahead, we are seeing a solid order pipeline from existing customers and are actively expanding into new use cases. On the overall profitability front, we achieved a historical financial milestone in the fourth quarter by achieving our first-ever quarterly GAAP-level net profit.

This historical pivot to profitability was primarily driven by gains from our strategic equity investments, which strengthen our broader ecosystem positioning and unlock business synergies. In 2025, our expenses were slightly widened. This was a deliberate front-loaded investment to accelerate Gen-7 mass production, expand into new cities, and strengthen our tech stack. Such investments are already starting to drive strong top-line growth. In the era of AI, we anticipate continuous investments into AI technology and talent to help us secure a long-term competitive edge. Beyond the technology benefits, our joint deployment model will also be a powerful lever for CapEx efficiency. By collaborating with partners to share the initial investment, we are able to scale our fleet rapidly while maintaining a lean balance sheet.

Looking ahead, we expect revenue growth to outpace the growth of operating expenses as we capitalize on our fleet scale and capture the virtuous cycle of positive UE. Finally, we closed the year with a highly robust balance sheet with substantial cash reserves of over $1.5 billion following our successful Hong Kong IPO. This solid capital position gives us the firepower to invest decisively into R&D, SG&A, and go-to-market capabilities. We are confident that the stepped-up investment will accelerate our pace on large-scale commercialization and deliver faster revenue growth in 2026. Looking ahead, we are crystal clear on our strategic priorities: tripling our robotaxi revenue, expanding our fleet target to over 3,000 vehicles, and deploying robotaxis to more than 20 cities globally by 2026.

We have ample dry powder to support these initiatives, and we will drive progress through our dual-engine growth strategy combined with our joint fleet deployment model that optimizes capital efficiency. We are well positioned to accelerate these targets and turn our operational momentum into sustained, profitable, and long-term growth for our shareholders. I will now turn the call over to the operator to begin our Q&A session. Thank you.

Q&A Session

Operator: We will now begin the question-and-answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, for the benefit of all participants on today’s call, if you have more questions, please reenter the question queue. If you ask questions in Chinese, please repeat them in English. The first question today comes from Ming-Hsun Lee with Bank of America. Please go ahead.

Ming-Hsun Lee: Hi. This is Ming from Bank of America, and thank you for giving me the opportunity to ask a question. My only question is that since you already have a target of over 3,000 robotaxi fleet by 2026, can you share your production ramp-up and deployment plan? Now that you have achieved the UE breakeven in Shenzhen and Guangzhou, how do you think about the future UE trajectory? Thank you.

James Peng: This is James. I will take this one. In my opinion, hitting the UE breakeven is a huge win for the whole industry, not just for us. It proves that our technology actually works in the real world. It also shows that robotaxi is not just feasible, but profitable at scale. Right after the UE breakeven in Guangzhou, we did it again in Shenzhen. This shows that our model is replicable, and we achieved this breakeven by focusing on service value, not discounting. What we have seen is that on the regulatory front, we see a policy tailwind to support the whole industry. In China, there are coordinated efforts between the central and local governments to bring robotaxi services to many cities. In our existing markets of the tier-one cities, we have seen more licenses issued to facilitate a larger fleet.

Globally, many countries learn from the progress in China and the U.S. to clear the policy hurdles and come up with regulations to support accelerated deployment. So the regulatory momentum gives us confidence to replicate our current success in many more markets both globally and in China. Therefore, to capture the market, two things we are focusing on this year: one is ramping up production, and the other is launching robotaxis in many more markets. On the fleet ramp-up, over the last two months, we have been focusing on producing the Toyota bZ4X, and we are also continuously producing more vehicles with Beijing Auto and Guangzhou Auto. With all three vehicles, we are confident we will hit over 3,000 units by year-end. Then on the ODD extension, we are pushing deeper into downtown hubs, and we are also expanding into new cities such as Hangzhou, Changsha, and many cities across the Greater Bay Area.

In terms of UE, since fares in China are relatively low compared with many global markets, and in China we already deliver positive UE and are continuing to improve UE, we expect better earnings in our existing markets and definitely a lot better margins overseas. We plan to expand this year into 20 cities, which will give us a very strong first-mover advantage. Our joint deployment model will also lower our CapEx expenditures, which can help us accelerate fleet growth and at least triple our robotaxi revenues this year. With this, I will get back to the operator.

Operator: The next question comes from Tim Tsao with Morgan Stanley. Please go ahead.

Tim Tsao: Hi. This is Tim from Morgan Stanley. Thanks for taking my questions. I just have a follow-up question about Pony AI Inc. American Depositary Shares’ latest operation. Based on the dual-engine strategy management just mentioned, regarding expansion strategy to enter over 20 cities this year, could you share details about which cities you plan to enter and what is the split between China and the overseas market? Separately, with geopolitical tensions escalating in the Middle East, are you seeing any challenges or headwinds to your operation? That is my question. Thank you.

James Peng: This is James again. I will take this one. Strategically, we are using our success in China as a blueprint for our global expansion. Because our technology and business model are proven, we can replicate quickly and broadly in global markets. In fact, we expect nearly half of the 20 cities we are targeting this year to be overseas, spanning Asia, Europe, and the Middle East. In terms of go-to-market strategy, we are teaming up with industry leaders to improve our joint deployment model, which can greatly reduce our CapEx expenditure. This helps us scale efficiently while at the same time building strong local networks. We are already launched in Zagreb, Doha, Dubai, and Singapore, partnering with global giants like Uber, Bolt, and Stellantis.

One example is that together with Uber and Verne, we have launched the first commercial robotaxi services in Europe. Looking ahead, we are exploring more European cities and also doubling down in Asia, such as South Korea and Singapore. Regarding the last part of your question, our efforts in the Middle East—first and foremost, risk mitigation remains our high priority. So far, we have not seen any material impact to our business from the current geopolitical tensions. We are still charging along with our efforts in the GCC region. We expect to roll out fare-charging services with Mowasalat in Doha, Qatar, and we are getting ready for fully driverless operations in Dubai after approval later this month. Back to the operator.

Operator: The next question comes from Liu Yu with CLSA. Please go ahead.

Liu Yu: Hi. Good evening, management. My question is on technology. So the world model and autonomous driving stack are now operating in multiple cities across different countries. Could you please tell us more about how the technology generalizes to new environments where the conditions could be very different from China? And what role does the world model play in accelerating your expansion plan? Thank you.

Tiancheng Lou: This is Tiancheng. I will take this one. First and foremost, the key insight is that driving is about interaction and negotiation with the agents around it. There is no difference whether you are in Guangzhou, Shenzhen, or Zagreb. Different cities and countries are essentially different combinations of similar scenarios. What varies is the probability distribution, not the fundamental nature of the challenges. Some example corner cases are reckless lane changes without checking mirrors or a fallen bicycle in the road. These corner cases occur everywhere. Our technology has already been validated in the most demanding conditions, operating at scale across all peak hours and all weather in dense urban cores in China’s major cities.

This means that when we enter a city like Zagreb, we are not starting from scratch. We are deploying our system that has already mastered a superset of the scenarios it will encounter. This is why we can operate directly in Zagreb’s urban core, which carries significant commercial value. Regarding the second part of your question, our world model plays an important role in accelerating this process. It enables us to model the interaction and negotiation dynamics between our vehicle and the surrounding agents, and to generate large-scale simulated scenarios that reflect the specific traffic patterns of our new markets. By reinforcement learning within this simulated environment, our system continuously improves its driving policy, allowing us to validate and fine-tune efficiently without needing to collect massive amounts of data in a new city.

The enablers for reaching 20 cities are clear. Our multi-OEM network provides locally suitable vehicle platforms. Our operational playbook—from remote assistance to fleet management—is highly standardized and repeatable. Our technology’s broad ODD coverage means we can operate in complex urban environments, not just limited to low-difficulty routes. Together, this gives us strong confidence in achieving our target of deploying robotaxi services in more than 20 cities worldwide by year-end 2026. With that, back to the operator.

Operator: The next question comes from Xinyu Feng with UBS. Please go ahead. Xinyu, your line is open. You may now ask your question.

Xinyu Feng: Hi. Can you hear me? Hi. Yes. Hi. Thank you for taking my question and congrats to the solid results. My question is about the joint deployment model. For vehicles Pony AI Inc. American Depositary Shares plans to add this year, can you elaborate a bit more on how you will apply the joint deployment model? And how should we think about the benefit of this model for the company and our value chain partners? Thank you.

Liu Wang: This is Liu. I will take this question. As you can see, we have hit the critical milestone of UE breakeven in Guangzhou and Shenzhen. After that, we have seen a lineup of partners in the whole ecosystem that want to join the robotaxi market, and we are their go-to choice. In this joint deployment model, our partner funds the vehicle CapEx and starts to tap into the whole robotaxi value chain—for example, ground operations, vehicle maintenance, and charging. We consider this a win-win situation for both of us. Our partner gets growing revenue from deployed vehicles, and we essentially are in an asset-light model to expand our fleet rapidly. In this year, we expect nearly half of our new vehicles to come through this model, led by Toyota.

Not only do we improve our capital efficiency in our expansion through this model, but it also creates an additional revenue stream through recurring direct income in the form of revenue sharing or AI driver license fees. This revenue stream, combined with our self-owned fleet fare-charging revenues, will help us to achieve more than triple robotaxi revenue in 2026. Beyond that, with the current lineup of our partners such as Toyota, OnTime Mobility, and ATB, we expect even more partners will jump on board this year. I will get back to the operator.

Operator: The next question comes from Purdy Ho with Fubon Securities. Please go ahead.

Purdy Ho: Thank you for taking my questions and congratulations on your results. Regarding the 1,000 robotaxis already contracted with Toyota, how are you planning to deploy these vehicles? And do you expect any future scaling up or strategic initiatives with Toyota down the road? Thank you.

James Peng: This is James. I will take this one. In terms of Toyota, I consider them not just a partner; they have been with us since 2019 as our largest strategic shareholder. The relationship between us goes way beyond just an auto supplier. It is a deep, strategic, long-term collaboration. In terms of the mass production of robotaxi vehicles, we have jointly launched several robotaxi models on Toyota platforms since 2019. In 2026, we are adding 2,000-plus new vehicles, and nearly half will be the new Toyota bZ4X Gen-7 vehicles. This model is jointly developed with Toyota Motor Company and GAC Toyota. The mass production is already live on Toyota’s assembly lines. There is great synergy between us. Their manufacturing capability and top-line platforms blend perfectly with our L4 technology and operational know-how.

Besides jointly developing vehicles, Toyota is also the first partner to adopt our joint deployment model, funding the fleet to help us scale capital-efficiently. This shows their incredible confidence in Pony AI Inc. American Depositary Shares, and together we are rolling out commercially starting from China’s top-tier cities. With this, I will get back to the operator.

Operator: The next question comes from Yuchian Ding with HSBC. Please go ahead.

Yuchian Ding: Thank you. This is Yuchian from HSBC. I have two. The first question is about the competition dynamics. How do you see the automakers getting into the robotaxi segment? And the second question is about the competitive edges. The market narrative is shifting more into scaling with more entrants getting in. What is Pony AI Inc. American Depositary Shares’ most unique leading advantage? Thank you.

James Peng: I will take the first one, and I will hand over to Tiancheng for the second part. Certainly, we have seen that especially lately there are many announcements about new players already entered or planning to enter the robotaxi business. Those new entrants include automakers, ride-hailing companies, tech giants, and startups. In general, I think this new entrance to the robotaxi space validates the long-term potential for our industry, and I very much welcome the new players. Essentially, they can make the whole ecosystem even larger. But in reality, L4, especially robotaxi, is such a complex system that it requires an integrated solution. As I mentioned in my prepared remarks, there are five pillars for the robotaxi industry—technology, policy, mass production, operation, and partnerships.

These five pillars are intertwined; simply throwing resources at them will not accelerate the development process. Over the years, we have developed a unique advantage across all aspects of the robotaxi industry. Regarding some of our competitive moats, I will hand over to Tiancheng to elaborate.

Tiancheng Lou: Thank you. Technically, I do not think automakers have an advantage in L4 robotaxi just because they are strong in manufacturing or in L2 systems. The key point is that L2 and L4 are fundamentally different. They are not just two points on the same path. In L2, as the mild system intervention increases, the accident rate can increase. Partial automation can create a false sense that the system is almost good enough until it fails in a situation where the human is no longer ready to take over. That is why the L2 path does not naturally lead to L4, especially when we are talking about a driverless fleet at scale. One unique advantage we have at Pony AI Inc. American Depositary Shares is our long-term investment in our world model and our L4-native virtual driver training approach.

The reason this matters is that L4 robotaxis need to be significantly safer than human drivers, and that cannot be achieved by simply imitating human driving behavior. To reach that level of safety, the system has to keep improving through large-scale trial and error in a virtual environment, which is why our world model is essential. In other words, the key to training an L4 virtual driver is building a virtual environment with strong enough sim-to-real capability, especially when it comes to interaction between vehicles. That is also why the L4 approach requires many years of investment in AI, and it does not improve mainly by collecting more real-world data. The second unique advantage is that we have a real robotaxi fleet in operation, and those fleets continuously help us see where the world model is still different from the real world.

The hardest part of L4 is not the first 99%. It is the last 1%: the long tail of rare, critical corner cases. We handle those cases safely, but it is not enough to look at the well-recorded trajectory. What really matters is understanding how the other vehicles may behave across many different intentions with the AI driver. This is exactly why the world model is so important. Only a world model can give you enough coverage of the full combination space of different intentions in the corner cases, and that kind of coverage is what L4 safety ultimately requires. At the same time, only fully deployed robotaxis can keep narrowing the gap between the world model and the real world. Real-world robotaxi operations let us observe and understand the actual behavior patterns of vehicles and pedestrians in those scenarios, where human driving data cannot observe interaction with robotaxis.

This is also aligned with the fact that new players typically can only start with a very small fleet. Regulators understand this logic as well, so they are naturally very cautious about granting permits at early stage. To summarize, automated entrants confirm the size of the opportunity. But L4 robotaxi is not something you get by extending L2. Pony AI Inc. American Depositary Shares’ unique advantage comes from two things: a world model built for L4 and a real robotaxi fleet that continuously helps to improve it. Together, they create a closed loop that keeps both the model and the product moving forward. With this, back to the operator.

Operator: The next question comes from Joel Ying with Nomura. Please go ahead.

Joel Ying: Thanks for taking my question. This is Joel from Nomura. I would just like to understand how management views the impact of NVIDIA launching their open-source model for smart driving as Level 4, which we just saw at GTC this year. Thank you.

Tiancheng Lou: For this question, I think the key is to distinguish between a model and the real product. An open-source autonomous driving model can be a good starting point but not the end product. There is still a very big gap between a model and a robotaxi fleet that is commercially deployed, safety-proven, government-approved, and operating at scale. Closing that gap is exactly where our core advantage lies. At Pony AI Inc. American Depositary Shares, our strength comes from years of full-stack in-house development and real L4 deployment at scale. That includes not just the software or the model, but also the vehicle architecture, sensor redundancy design, domain controller, operating system, validation, and the commercialization capability needed to run actual robotaxi services.

For example, sensor customization, redundant design, direct functional safety, manufacturability, and BOM cost. Our OEM partnerships are also very different from a plug-and-play approach; they give us better system integration, higher reliability, and lower overall system cost. We view progress from NVIDIA as moving the ecosystem forward. At the same time, we believe the real barrier to entry remains very high. And, of course, NVIDIA is an important partner of ours on domain controllers. We maintain a strong collaborative relationship. With this, back to the operator.

Operator: The next question comes from Tianyu Liu with CITIC Securities. Please go ahead.

Tianyu Liu: Hi, this is Tianyu from CITIC Securities. Thanks for taking the question and congratulations on rapid growth in your robotaxi service. I have one question. How do you plan to allocate your Hong Kong IPO proceeds? And given your accelerated development targets, do you expect any upward revisions to the 2026 cost and expenditures?

Liu Wang: This is Liu. I will take this question. As I mentioned earlier, we have ample cash reserves, about $1.5 billion as of December 2025, which was driven by our Hong Kong IPO proceeds. We received proceeds of more than $800 million. This definitely secures long-term capital to fuel multiyear growth. For us, the 2025 achievements in terms of Gen-7 deployment and UE breakeven made us a clear industry leader. Looking forward, we look for accelerated top-line growth to widen our leading position and push the whole industry towards the next stage. Hence, we need to strategically increase our investments. We have significantly scaled up the number of robotaxis operating across China’s tier-one cities, especially in Shenzhen and Guangzhou.

We also recently entered new cities in China such as Hangzhou and Changsha, and internationally in Croatia, and plan to deploy in more than 20 cities by this year. In order to support the multiple market expansion, we will invest in business development, operations, and marketing. As we scale our robotaxi deployment, we are expanding our robotaxi fleet through joint deployment models as well as investing in self-owned vehicles. We would also recruit AI talent and invest in AI infrastructure to further improve our virtual driver capability. We think this will allow us to consistently meet the public’s high expectations for safety, reliability, and quality to offer a trusted robotaxi service. James already mentioned that this is a critical period to expand market share, which we think requires necessary investment to solidify our technological and operational moats.

We believe the strategic increase in investment is a value-driven trade-off to secure long-term market leadership. With disciplined capital allocation and the benefits from the joint deployment model, we believe this will pay off with much faster growth, city expansion, and fleet size, and will also lead the whole industry into a much advanced phase. Thank you. I will now get back to the operator.

Operator: The next question comes from Kai Shao with CICC. Please go ahead.

Kai Shao: Thank you. This is Kai from CICC. I have one question regarding raw materials information such as memory. Could you share your view on how inflation impacts your production plan and cost items? Thank you.

Liu Wang: This is Liu again. I will take this question. Thank you for asking this important question. As I mentioned earlier, the impact on both vehicle and ADK BOM cost is very limited. We think this resilience is driven by our proactive supply chain strategy and inventory management with our ADC domain controller business. Through this approach, we secured our memory even before the market went into price inflation and shortages. We are very confident that we can fully support this year’s robot production target of over 3,000. Thanks to the supply chain measures and our continuous scaling, we remain on track to achieve a 20% reduction in ADK BOM cost for 2026 compared to Q2 2025 levels. We will carry out ongoing hardware and software optimization, and this will further reduce our overall cost down the road. Thank you, and I will get back to the operator.

Operator: There are no further questions at this time. I would like to now turn the call back over to the company for closing remarks.

George Shao: Thank you once again for joining the earnings call today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you in the next quarter.

Operator: This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your line.