Also in the list is Pony AI, another company emerging from China, which is backed by Toyota and specializes in building autonomous vehicles. A multi-year ban imposed by Beijing on offshore capital raising will not stop Chinese firms from going public on the US stock market.

Zeekr is a luxury Chinese electric vehicle startup that started trading on the New York Stock Exchange in May, while WeRide is another AV startup that also plans to file an IPO in the U.S. this year at a valuation of $5 billion, although plans had been postponed as of August.

Pony was worth $8.5 billion when it funded in 2022. Toyota, for one, had also participated in that round as a follower investor following the infusion of $400 million in 2020 by the Japanese automaker in the company, according to data at PitchBook. NEOM has locked up a 13.4% stake in Pony. The Chinese AV startup has since secured $100 million from Saudi Arabia's NEOM in 2023 and $27 million from Chinese VC GAC Capital in October.

But the S-1 to go public reveals that Pony's board of directors has recently cut the minimum valuation of its IPO down to $4 billion. Pony also lowered the minimum target for what it wants to raise in the transaction from $425 million to just $200 million.

That's not all that stood out in Pony's IPO filing, though, so here are our top four takeaways. 

Modest fleet and operations
There are numbers aplenty in IPO filings that might previously have been cryptic or meaningless, and Pony Inc.'s is no exception.

The company said it operates a 190 vehicle "robotrucks" fleet in Beijing and Guangzhou and more than 250 robotaxis in Beijing, Guangzhou, Shenzhen and Shanghai. It can collect fares for robotaxis in the first three cities, and is fully driverless in Guangzhou and Shenzhen.

The robotaxi side, Pony says it averages 15 daily orders per robotaxi from the 220,000 users registered on the PonyPilot app. In total, it says it's amassed more than 20 million "autonomous driving miles," although just 2.4 million of those were truly driverless.

On the flip side, Pony complements its robotaxi business with an increasingly fruitful robotruck business. According to it, it has already secured 57 corporate customers, accounting for 73% of total revenue in the first half this year. But a chunk of that money is coming from just three customers, who generated 62.8% of all revenues in the same period.

Revenue up and to the right?
It's no mystery that autonomous vehicles are an expensive business. And while Pony claims it generated gross profits of $32 million and $17 million in 2022 and 2023, respectively, the company lost more than $270 million over those years.

A huge driver of those losses has been Pony's R&D spend. Understandable, given that Pony is a company developing pioneer technology, involving an extremely sensor-heavy autonomous stack. But at what point will Pony let operations take precedence over R&D? As of June 30, the company's roughly 1,300-person workforce is 44% R&D, 16% technology deployment and production and just 28.5% operations. It paid $73 million in salaries to its R&D employees last year and exited the first half of this year with $335 million in cash. Pony projects the business will generate much more revenue in the years ahead-fully particularly as taxi fares from robots rise. Sounds less sanguine, though, about cost containment, because in the filing there is no statement of its expectations that the cost of that revenue should decline as time passes -only that those costs will "continue to evolve in the near term.".

Now, Pony's revenue did nearly double to $24.7 million in the first half of 2024 compared to the same period a year ago.

It also slashed its losses year-over-year in the first half. But while it may look like Pony's revenue is climbing upward and to the right if one only looks at the first half of the year, the company has a long way to go if it hopes to top 2023's total revenue of $71.9 million. SIXTY. PAGES. OF. RISK. Every public company must disclose the risks of the business when they go public. Yet hell broke loose if Pony wasn't damned detailed with 60 pages of disclaimers.

One of its primary risks? It's coming off a shortage of sufficiently skilled staff with knowledge of U.S. GAAP (Generally Accepted Accounting Principles) to ensure proper compliance with SEC requirements.
While Pony says it has overcome this weakness to date through the end of 2023, there is very recent proof that shows just how real of a risk this can be to a young business in Fisker. The nosedive into bankruptcy that the EV startup took recently was, in large part, triggered by it missing the deadline to file its third-quarter financial results last year.

There's also the old People's Republic of China conundrum – something Zeekr is familiar with. We'll let Pony say it: "The PRC regulatory authorities have significant oversight over our business and may influence our operations as they deem appropriate to further economic, regulatory, political and societal goals."

On the other hand, Pony noted a very slight risk of its extremely limited robotaxi testing in the United States not being permitted to continue because of new regulations that ban the import and use of connected vehicles of Chinese origin. Pony does have a permit to test AVs with a safety driver at the wheel in California but says that its operations in the United States amounted to "less than 1% of our total revenues in 2023 and the six months ended June 30, 2024."

Pony paints a pretty picture

We are now several years removed from the special purpose acquisition merger mania that allowed startups to run amok with projections about their businesses. Do you recall when Faraday Future projected it would sell more than 100,000 EVs in 2024? Roughly 13 to date.

This is a traditional IPO, so Pony doesn't have nearly as much license to be so unhinged with its projections. Still, Pony indulges in some self-flattering imagery of what its technology is capable of that we'd be remiss not to share with you.
On the public roads of China's metropolises, Pony has achieved what was once only depicted in science fiction — building a car that drives itself," the company writes. "Passengers, wide-eyed with wonder, unlock the door using the app and climb into the back seat."

"And stepping out of the car, the passengers pay the fare through the app and conclude this awe-inspiring ride. Meanwhile, the robotaxi drives itself away to pick up the next passenger, leaving one to ponder what other marvels the future holds."

With wide eyes, surely.