By Jiahui Huang

Chinese self-driving company Pony AI reported a wider quarterly net loss, but its top line jumped thanks to sharply higher revenue from robotaxi services, a welcome boost as it strives for commercialization.

The Guangzhou, China-based company, which makes driverless vehicles, said Tuesday that its first-quarter net loss widened to $43.0 million from $20.6 million a year earlier. Revenue increased 12% to $14.0 million.

Like many of its peers, Pony AI has yet to turn a profit and is racing to hit single-unit break-even, meaning it books profit every time it adds a new robotaxi to its fleet.

During the first three months of the year, Pony AI's robotaxi services revenue nearly tripled to $1.7 million, and robotruck services revenue rose to $7.8 million from $7.5 million a year earlier.

Pony AI attributed the stronger robotaxi performance to demand for higher-fare rides, which has been growing as it expands in major cities in China.

"2025 is the year of scaling up for Pony AI and we embraced it with strong growth momentum," Chief Executive James Peng said in a statement.

By the end of this year, New York-listed Pony AI aims to expand its fleet to more than 1,000 robotaxis from around 300, and has been spending big as it aims for mass production by mid-2025.

In the first quarter, Pony AI's research-and-development expenses rose 60% to $47.5 million due to heavy investments in the mass production of the latest generation of robotaxis, among other factors.

In April, the company said it managed to cut production costs of its most advanced autonomous-driving system by 70%, bringing it closer to profitability.

Pony AI's first-quarter gross margin weakened to 16.6% from 21.0%, which the company attributed to revenue-mix changes.

The results come as Pony AI pushes to bring its self-driving cars to more streets in China and overseas.

Pony AI recently signed a deal to deploy its vehicles to ride-hailing giant Uber Technologies' fleet, starting with a pilot program in the Middle East. Pony AI is also working with ComfortDelGro, one of the largest land transport companies in Singapore, on a joint robotaxi pilot program.

At home, it faces rising competition in the autonomous driving space from the likes of Baidu and WeRide. Chinese officials have championed the technology as a new economic growth driver, creating a backdrop for companies to develop even as safety concerns put the industry under scrutiny.

Analysts say there is a lot of opportunity in China's expanding robotaxi industry, seeing room for significant growth.

Goldman Sachs analysts estimated recently that the country's robotaxi market is likely to grow to $12 billion in 2030 from $54 million this year.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

May 20, 2025 06:25 ET (10:25 GMT)

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