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James Peng, cofounder and CEO of Chinese robotaxi startup Pony AI, was reviewing customer data with his team, and he was facing a puzzle. Every day, one of his users would book a robotaxi at the same time: right after lunch.<\/p>\n
\u201cAfter a while, we called him and asked why he always took a ride at that time,\u201d Peng recalled to Fortune.<\/p>\n
The user\u2019s answer? \u201cThe environment is great. It\u2019s clean. I use it as my napping place!\u201d<\/p>\n
For Peng, the regular napper is a sign of how quickly riders are adapting their behavior as self-driving cars start to take over China\u2019s\u2014and the world\u2019s\u2014streets.<\/p>\n
Chinese robotaxis are plying the streets of cities like Guangzhou, Beijing, and Shanghai. And much like how Waymos are transforming user behavior in San Francisco, robotaxis like Pony AI\u2019s are changing what Chinese passengers are doing.<\/p>\n
\u201cWithout a driver in the loop, we have to find creative ways to do a lot of things,\u201d Peng says. If a passenger leaves a door open\u2014a common problem for robotaxis\u2014the car might chirp at a passerby in a \u201ccute voice,\u201d in Peng\u2019s words, asking them to close it. If that doesn\u2019t work, Pony AI will reach out to China\u2019s army of delivery gig workers, asking them to close the door and maybe \u201cclean up [the car\u2019s interior] a little bit,\u201d says Peng.<\/p>\n
Pony AI is one of several Chinese companies, alongside fellow startup WeRide and search giant Baidu, that are aggressively expanding autonomous vehicles in China and beyond. Pony AI has 1,200 taxis on the road, with plans to hit 3,000 by the end of the year\u2014on track with Waymo. As of early 2026, over 50 Chinese cities allow self-driving cars on public roads in a testing capacity. At least 10 allow commercial operations, the same as in the U.S.<\/p>\n
And Chinese robotaxis are now in service well beyond China. Pony AI says it\u2019s now delivering 26 rides per car per day, or somewhere north of 25,000 daily in total, with operations in the United Arab Emirates, Qatar, and Singapore, and is planning to expand into Europe; its counterparts are also expanding around the world. (By comparison, Waymo is present in only two non-U.S. cities: London and Tokyo.)<\/p>\n
A number of structural advantages have made China a fertile test bed for self-driving cars.<\/p>\n
First, it has a strong manufacturing base that can drive the cost of components down to ultra-affordable levels. That\u2019s thanks to companies like Hesai Technology, which makes the lidar sensors needed for robotaxis to see what\u2019s around them; the Shanghai-based company has slashed the cost of such sensors by 99.5%, enabling them to be installed in cars that cost as little as $15,000. Add China\u2019s broader strength in making EVs and connected cars, and robotaxi firms can tap a wide array of affordable, high-quality vehicles for their fleets.<\/p>\n
Peng sees a world with fewer human-driven cars as \u201cinevitable,\u201d citing safety and convenience. \u201cPeople love to drive; they don\u2019t love driving all the time,\u201d he says. But he doesn\u2019t see that trend as a danger sign for the labor force, noting, \u201cAI will change what we consider \u2018work.\u2019\u2009\u201d<\/p>\n
Peng points to an additional advantage: the ready availability of tech talent. China now boasts deep networks of big tech companies, startups, and universities that train the next generation of founders and engineers. \u201cWhen I left China more than 20 years ago, that kind of ecosystem really didn\u2019t exist,\u201d Peng says. \u201cNow you have internet companies and tech companies that took talent and trained them. It\u2019s a numbers game: Quality is important, but with enough quantity, you can create an ecosystem.\u201d<\/p>\n
Chinese consumers are also more willing to consider self-driving cars. Around 85% of Chinese drivers reported being comfortable with robotaxis without human supervision, compared with 39% of U.S. drivers, according to a 2023 survey from PwC. Far fewer Chinese\u2014just 35%\u2014drive a car, meaning they may be more willing to hire a robotaxi.<\/p>\n
Finally, there\u2019s government support for automated driving, which Beijing sees as a strategic industry. Local governments offer pilot zones, subsidies, and speedy permits for high-level autonomous driving, while national regulators have issued guidelines to move robotaxis from testing to commercial services in dozens of cities.<\/p>\n
HSBC predicted last year that robotaxis could soon capture around 6% of China\u2019s total taxi and ride-hailing market, generating $40 billion a year in fare revenue; meanwhile, UBS estimated that the size of the robotaxi market in China could reach $183 billion a year\u2014if self-driving cars completely replace human-driven taxis.<\/p>\n
Pony AI gets its start<\/p>\n
James Peng spent most of his career in Silicon Valley. After getting his PhD from Stanford, he spent seven years at Google, working with its ads teams; he then joined the U.S. operations of Baidu, the Chinese Big Tech company behind the country\u2019s leading search engine. By 2015, he\u2019d become head of the company\u2019s autonomous driving division in the U.S.<\/p>\n
Peng calls Baidu a \u201cmagnet\u201d that attracted talented engineers and researchers from across the industry, several of whom went on to found their own ventures.<\/p>\n
Baidu was an early supporter of AI among China\u2019s tech sector, including making a concerted pitch to hire Geoffrey Hinton, an early AI pioneer.<\/p>\n
Pony AI\u2019s cofounder and chief technology officer, Tiancheng Lou, is also a Baidu alumnus, as is Tony Han, CEO of competing robotaxi firm WeRide, who was chief scientist of its autonomous driving unit. Even Dario Amodei, Anthropic\u2019s cofounder, spent a year at Baidu.<\/p>\n
In late 2016, Peng made the jump to startup founder, establishing Pony AI in Silicon Valley. It started testing self-driving cars in California in 2017, then in China in 2018.<\/p>\n
Pony AI debuted on the Nasdaq in late 2024 with a $413 million IPO, making it a rare Chinese startup venturing into U.S. markets as relations between Washington and Beijing soured. Just one year later, it raised $863 million through a secondary listing in Hong Kong.<\/p>\n
A Pony AI robotaxi awaits its next fare in Shenzhen, China.<\/p>\n
VCG\/VCG\/Getty Images<\/p>\n
By late 2025, Pony AI claimed its robotaxis were operating at breakeven in Guangzhou; by March, it said robotaxis in nearby Shenzhen were breakeven as well. Pony AI reported record usage of its robotaxis over the Chinese New Year holiday, hitting an average of 26 orders a day per vehicle. Each robotaxi generated an average of 338 Chinese yuan ($48.91) a day.<\/p>\n
Pony AI generated $60.8 million in revenue in the first nine months of 2025, a 54% year-on-year jump. But investing in a new technology is expensive. The company spent $156.9 million on research and development between January and September 2025, contributing to a $152.2 million net loss over the same period.<\/p>\n
On March 26, after this article was originally published, Pony AI reported full-year revenue of $90 million, a 20% increase. Net loss also narrowed significantly to $75 million, smaller than the $275 million reported in 2024. Pony AI also unveiled a new deal with Uber and autonomous driving startup Verne to bring commercial robotaxis to Europe, starting in the Croatian city of Zagreb.<\/p>\n
Pony AI\u2019s shares have performed poorly since the Hong Kong IPO, down by around 30% from the original offer price. WeRide, which had its own secondary Hong Kong listing at the same time as Pony AI, has seen its shares drop by about as much.<\/p>\n
Going global<\/p>\n
Pony AI is now venturing into international markets: specifically, Dubai in the United Arab Emirates; Doha in Qatar; Seoul, Hong Kong, Singapore, and Luxembourg. (Peng also mentioned the startup will soon expand to another European market, though didn\u2019t specify which one.)<\/p>\n
The startup is also signing partnerships with global players, including ride-hailing platforms Uber and Bolt; ComfortDelGro, one of Singapore\u2019s largest transit and taxi operators; and Stellantis, the European car giant. Pony AI has a long-standing relationship as well with Toyota, an early backer: Its latest generation of robotaxi is developed through a joint venture between Toyota and Guangzhou Automobile Group, a Chinese state-owned carmaker.<\/p>\n
More so than many others, Chinese consumers have embraced the idea of robotaxis<\/p>\n
85%<\/p>\n
Share of Chinese drivers who say they\u2019d be comfortable in a robotaxi without human supervision<\/p>\n
35%<\/p>\n
Share of Chinese people who drive
Sources: PWC; Government data<\/p>\n
Pony AI\u2019s long-term plan isn\u2019t to own the self-driving cars, but rather provide the technology that keeps them running. The startup positions itself as the \u201cvirtual driver\u201d\u2014providing the AI, software, and platform\u2014while partners fund and operate the physical fleet.<\/p>\n
\u201cThat\u2019s where we create the greatest economic and societal value,\u201d Peng explains. \u201cOur most important motivation is to scale as fast as possible, and put as many \u2018drivers\u2019 into the market as possible. Everything else could be done by somebody else.\u201d<\/p>\n
Partners, meanwhile, can earn a return from vehicle ownership. \u201cIf you can earn, say, 5% return by owning vehicles instead of 3% from keeping that capital in the bank, it\u2019s a good business to be in.\u201d<\/p>\n
One market that\u2019s not in the cards for Pony AI? The U.S., which takes a dim view of Chinese cars owing to concerns over data security. The outgoing Biden administration barred the sale of Chinese \u201cconnected vehicles\u201d from 2027 onward.<\/p>\n
\u201cWe\u2019re unlikely to run large-scale commercial operations in the U.S. anytime soon,\u201d Peng says. \u201cBut I think R&D activities and exchanges of ideas are still permitted.\u201d The company retains a research team in Silicon Valley.<\/p>\n
Robots vs. humans<\/p>\n
Pony AI\u2019s robotaxis\u2014including models like the GAC Aion V, a compact crossover SUV\u2014are spacious and comfortable, similar to other luxury EVs getting churned out by China\u2019s many factories.<\/p>\n
A voice welcomes passengers as they enter the car; a screen mounted in the rear cabin allows them to start the journey and monitor what\u2019s happening around the vehicle on a real-time map. A cute robot-like avatar\u2014at the time wearing a horse costume to celebrate the incoming Year of the Horse\u2014shared updates on the car\u2019s journey.<\/p>\n
The trip feels oddly smooth, as the robotaxi cleanly shifts lanes and slows down to avoid hitting other vehicles and bicycles on the road. It\u2019s a quieter journey than what a human-driven taxi normally feels like.<\/p>\n
Peng understands that difference. \u201cThe human driver does more than just driving: They clean, they charge the car, they have conversations with the passenger, or even, in some cases, comfort passengers,\u201d he says.<\/p>\n
Still, as self-driving cars take off, that leads to a question: What will human drivers be doing instead? Anthony Tan, CEO of Grab (an investor in WeRide), suggested on a recent earnings call that \u201cdrivers could be remote safety drivers, data labelers; they could change lidars, cameras, and so forth.\u201d<\/p>\n
Investors are jumpy, too. In early 2026, U.S. trucking shares collapsed after a little-known karaoke-turned-AI firm announced its product could help increase freight volumes by 300% without adding staff.<\/p>\n
Peng takes a measured view. \u201cAI will not destroy the workforce; it will change what we consider \u2018work,’\u201d he says. \u201cA lot of the fear is overblown.\u201d<\/p>\n
Yet he\u2019s certain that a world with fewer human-driven cars is \u201cinevitable,\u201d citing efficiency, safety, and convenience. \u201cPeople love to drive; they don\u2019t love driving all the time,\u201d he says.<\/p>\n
Peng\u2019s belief that robotaxis are a social good is echoed by his counterpart at WeRide, Tony Han. \u201cMachines won\u2019t be drunk, won\u2019t overdose. Machines are very reliable. Fatal accident rates for robotaxis are much lower than human drivers,\u201d Han told Fortune last October.<\/p>\n
What about the roads themselves? Urban infrastructure, after all, is still pretty dumb\u2014forcing robotaxis to be designed around transit systems that are decades old. Will that limit how far robotaxis can go?<\/p>\n
Peng is realistic on that front. Perhaps, he acknowledges, the roads will get smarter in 20 or 30 years, and make autonomous driving safer and more efficient. But he\u2019s not going to wait around for the roads to be rebuilt.<\/p>\n
\u201cIf we want autonomous vehicles to really be part of everyday life, they have to cope with the roads we have now. That\u2019s the beauty of AI: We can train our AI \u2018drivers\u2019 to be smart enough to be on the existing infrastructure.\u201d<\/p>\n
Update, March 26, 2026: This article has been updated to include Pony AI\u2019s full-year 2025 results, and its new partnership with Uber and Verne.<\/p>\n
This article appears in the April\/May 2026: Asia issue of Fortune with the headline \u201cThe world\u2019s consumers are ready for robotaxis. James Peng of Pony AI wants to make sure they\u2019re riding in his\u201d<\/p>\n
#Consumers #ready #robotaxis #James #Peng #Pony #theyre #riding<\/p>\n","protected":false},"excerpt":{"rendered":"
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