Tokyo-based startup Tier IV, Inc., which is developing autonomous driving systems that use AI, has listed itself on the Growth Market at the Tokyo Stock Exchange.

This marks the first time a company focused purely on autonomous driving has gone public in Japan.

Tier IV plans to use the funds raised from the listing to accelerate research and development, countering foreign rivals that are building their presence in the Japanese market.

At its trade debut on Wednesday, Tier IV's stock finished at 1,015 yen, falling short of its 1,085 yen offering price. The company was established in 2015 with Shinpei Kato, then an associate professor at Nagoya University, taking the helm as chief executive officer.

Backed by Suzuki Motor Corp., an investment firm associated with Toyota Motor Corp. and others, Tier IV develops essential operating software for autonomous driving.

Tier IV mainly supplies self-driving buses to local governments and collaborates technically with automakers, but self-driving vehicles have yet to gain widespread traction.

The company forecasts a consolidated net loss of 6.7 billion yen for its business year ending September 2026, compared with a net loss of 4.7 billion yen the previous year.

The government aims to have 10,000 autonomous vehicles in service nationwide by fiscal 2030.

Should the vehicles see mass production, Tier IV expects a substantial boost in earnings from licensing fees paid by its manufacturing partners, according to the company.

In autonomous driving, most conventional systems have relied on human coding to operate on fixed routes. In recent years, however, AI-based systems -- where AI learns on its own and navigates by assessing its surroundings -- have been going mainstream.

AI technology adapts more fluidly to evolving road conditions, while keeping development costs significantly lower.

Tier IV itself began focusing heavily on AI driving technology in 2024, but overseas competitors enjoy an early lead, with driverless rides gaining traction in both the United States and China.

In Japan, British startup Wayve Technologies Ltd. plans to trial autonomous taxis within the year in partnership with companies including Nissan Motor Co.

Turing Inc., a Japanese startup established in 2021, also aims to realize fully autonomous driving through AI-based technology by 2030.

Tier IV plans to allocate the funds it has raised from going public to AI-based research and development.

"As an industry game-changer, we aim to create an economic sphere," Kato said at a press conference on Wednesday.

Given growing concerns that foreign autonomous driving systems could track the location of high-profile individuals, there are hopes that Japanese companies will develop their own technology.

"From the perspective of economic security as well, domestic technology needs to be refined," said Prof. Yoshihiro Suda at Tokyo University of Technology.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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July 23, 2026 09:01 ET (13:01 GMT)

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