Pony AI PONY, an autonomous-driving company based in Guangzhou, China, has seen its shares tumble 29.5% over the past 30 days, faring worse than the Zacks  Transportation - Equipment and Leasing industry’s 1.4% decline.

1-Month Price Performance

Image Source: Zacks Investment Research

The pullback in the shares of this key player in the autonomous vehicle or AV space was not unexpected. The Chinese robotaxi company, which made its Nasdaq debut in November 2024, saw its shares skyrocket in excess of 245% in the mid-April to mid-May period.

Image Source: Zacks Investment Research

Despite the recent drop, PONY’s robust fundamentals can’t be ignored. The pullback over the past month might be an opportune moment to buy PONY shares for long-term investors. Currently priced at $12.65, the stock is 88.8% below its 52-week high, leaving ample room for growth.

Reasons for Staying Bullish on PONY Stock

Focus on Fleet Size Expansion: Pony AI, which already has an impressive fleet of robotaxis, is expanding its fleet, with around 250 robotaxis late last year. The Chinese company aims to have in excess of 1,000 by 2025. Management stated on the first-quarter 2025 conference call that the large-scale deployment will ramp up gradually throughout the second half of the year. PONY is working closely with its partners to ensure a quick ramp-up. Pony is also looking to strengthen its agile and flexible approach to sourcing key components to allow it to rapidly adapt to the changing demand and ensure the efficient execution of its mass production plans. Moreover, the company’s long-lasting collaborations with the central and local governments should also help in the quick ramp-up. PONY’s government collaborations not only enhance its credibility but also position it to secure the licenses required for commercial deployment of its Gen 7 robotaxis. Pony’s seventh-generation robotaxis have already hit the roads (for testing purposes) in the southern Chinese megacities of Guangzhou and Shenzhen.

Partnerships Bode Well: Pony AI, a global leader in autonomous driving technology, has inked multiple partnerships that support its ambitions. Pony AI and the Japan-based Toyota Motor TM entered into a joint venture to mass-produce fully driverless robotaxis in China. The joint venture leverages GAC Toyota's production capabilities to mass-produce the autonomous vehicles. GAC Toyota refers to the joint venture between Toyota Motor Company and GAC Group (Guangzhou Automobile Group) to manufacture and sell Toyota vehicles in China. In May, PONY partnered with Uber Technologies UBER to deploy the former’s robotaxis onto the Uber platform. The partnership is expected to first launch in a key market in the Middle East later this year, with scope for further expansion. During the initial pilot phase, the robotaxis will have a safety operator onboard. PONY’s technology is a suitable choice for Uber's global platform as it is scalable and cost-effective. Recently, PONY entered into a partnership with Shenzhen Xihu Corporation Limited, Shenzhen’s largest taxi operator. Pony, through this association, aims to jointly deploy its fleet of 1,000+ seventh-generation robotaxis in the city in the coming years. This partnership marks a huge step in integrating autonomous driving with local mobility networks by adopting an asset-light and AI-empowered model. The adoption expedites the large-scale deployment of safe, efficient, and intelligent mobility services to a broader passenger base in Chinese tier-one cities.