Both companies notched an important new advance last week when Shanghai unveiled a major expansion to its robotaxi program

Key Takeaways:

• Pony AI, WeRide and Baidu were among eight groups awarded licenses to operate in a major expansion of Shanghai's robotaxi program
• Pony AI's stock is up 16% since its U.S. listing last November, while WeRide has lost a third of its value since its Nasdaq trading debut a month earlier

Uber and its former CEO Travis Kalanick may also be taking bets on this particular race, with the former potentially backing both sides as the latter places his bets on Pony, based on recent reports that we'll detail shortly.

That development looks quite significant, since Shanghai previously limited robotaxi testing and services to its relatively remote Jiading district. The expansion to Huamu will bring robotaxi services to within 3 kilometers of Shanghai's Lujiazui financial district, home to some of the world's tallest buildings. Jinqiao is also home to many foreign companies and a large white-collar community more likely to use such robotaxi services.

The Shanghai expansion complements strong presences by Pony, WeRide and Baidu's Apollo Go in China's four megacities that also include Beijing, Shenzhen and Guangzhou. Just a day before announcing the Shanghai move, Pony AI announced its formal launch of around-the-clock service in Guangzhou and Shenzhen, expanding from 15-hour daily operation using rapidly maturing technology that allows for better autonomous driving at night.

Technology development aside, all three of these companies have also become quite adept at putting out steady streams of announcements on all their latest developments, trying to keep investors excited on their slow road to commercialization. WeRide has issued 27 announcements this year alone, or about one per week, while Pony AI has issued 17, or one every 12 days. No matter is too small for either company to shout about.

Both companies are in the early stages of trying to develop various global markets in the Middle East, Europe and North America, though the overwhelming amount of their operations are currently in China.

Despite their relatively similar profiles, shares of WeRide and Pony AI have fared quite differently since the former listed in New York last October and the latter followed a month later. Pony's shares haven't exactly galloped ahead, but are still up about 16% from their IPO price. That contrasts sharply with WeRide, whose stock has lost about a third of its value since its trading debut.

Pony's rally has lifted its value to about $5.4 billion, while WeRide has dropped to about half that at $2.9 billion. Pony also boasts a stronger price-to-sales (P/S) ratio of 72, compared with WeRide's 58. Here, however, we should point out that both figures are quite inflated, since neither company is generating too much revenue yet.

Accelerating commercialization

The growing divergence between this pair appears to lie in Pony's faster commercialization of its core robotaxi services compared with WeRide. Pony's revenue rose 12% in this year's first quarter to $14 million from $12.5 million a year earlier, outpacing WeRide's 1.6% year-on-year gain to 72.4 million yuan ($10.1 million) from 71.2 million yuan over that time.

While both of those revenue figures are quite small, they still consist mostly of non-robotaxi operations for both companies. But the robotaxi business is growing quickly for each, and is likely to become their biggest revenue source not far down the road.

Both companies have similar-sized fleets, with Pony AI forecasting it would operate 1,000 vehicles by the end of this year, compared with 1,200 for WeRide at the end of March this year.

Not surprisingly, both Pony and WeRide are currently losing money, though not at an alarming rate. Pony lost $37.4 million in the first quarter, but still has $738.5 million in cash and other highly liquid investments in its coffers – enough to fund similar losses for 20 years. Similarly, WeRide lost 385 million yuan in the quarter, but also had 4.43 billion yuan at the end of March, or enough to fund its losses for more than 11 years.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.