The future of autonomous driving (AD) is quickly taking shape. Pony.ai, one of the space’s leading companies, has demonstrated notable progress in pioneering self-driving vehicles. Most recently, though, the AD technology innovator took a big step forward in testing a particular type of vehicle; Pony.ai has acquired the necessary license to begin testing autonomous commercial trucks on the road in Guangzhou, China.
This development could help usher in both the next phases of both autonomous driving and commercial trucking, but there’s one company it won’t be good news for: Tesla (NASDAQ:TSLA). Progress from rivals like Pony.ai could easily serve to push TSLA stock down as the company falls further behind in the driverless race.
Like Tesla, Pony.ai is based in the U.S. but has a sizable presence in China. However, while Pony.ai has embraced lidar (light detection and ranging) technology to guide self-driving vehicles, Tesla CEO Elon Musk has rebuked the technology. Now, Musk may be about to pay the price.
What This Means for TSLA Stock
News of Pony.ai’s progress likely isn’t the primary factor pushing TSLA stock down today. But that doesn’t mean this development isn’t worth a closer look.
As a privately held company, Pony.ai doesn’t receive as much attention as its publicly listed peers. While Tesla has struggled to develop its full-self driving (FSD) technology, though, Pony.ai has been quietly making progress. In August 2023, the firm partnered with Toyota (NYSE:TM) to mass produce robotaxis in China. However, that’s only a recent development. As Electrek reports:
“Since the launch of its robotaxi app in December 2018, Pony.ai has become the first to commercialize autonomous taxi services in the Chinese cities of Beijing and Guangzhou and one of the first companies licensed to operate in other tier-1 cities, such as Shanghai and Shenzen. It has also expanded US cities like Tucson, Arizona and even signed a partnership to bring its technology to the futuristic urban development NEOM in Saudi Arabia.”
By contrast, when Tesla makes headlines for its self-driving technology, it isn’t usually for the right reasons. Data from the National Highway Traffic Safety Administration (NHTSA) reveals that, since 2019, Tesla’s Autopilot feature has been linked to 17 fatalities and 736 crashes. More recently, a Florida judge found “reasonable evidence” that Musk and other execs knowingly allowed vehicles with defective Autopilot technology to be operated in unsafe areas. The dust is still settling from this news and TSLA stock is still falling in response.
The Road Ahead
Every positive update from a competitor sets Tesla back even further from cornering the market on self-driving vehicles. If Pony.ai’s road tests go well, the company could easily end up partnering with other automakers to help get self-driving trucks on the road and moving goods. This new phase of driving will take shape slowly, but Pony.ai’s license news shows it’s on the way.
While this is bad news for TSLA stock, other companies also have the opportunity to profit. One likely winner is Luminar Technologies (NASDAQ:LAZR), a leader in the lidar space that has partnered with leading automakers and collaborated with Pony.ai on robotaxis.
I have speculated before that lidar technology could enable companies to blow past Tesla to the front of the driverless race. Now, Pony.ai may do exactly that.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
