Investors collectively pushed the acceleration pedal on Pony AI (PONY +12.51%) on Monday. They sent the Chinese autonomous driving stock nearly 13% higher on the day, thanks to the company's announcement of a promising business collaboration.
An big outsourcing move
That morning, Pony AI announced that it had expanded its existing partnership with next-generation Chinese transportation hardware company Sunlight Mobility.
Image source: Getty Images.
According to Pony AI, this will see the company adopt an asset-light business model, in which Sunlight Mobility will finance the manufacture of Pony AI's Gen-7 robotaxis. The immediate goal will be to deploy a fleet of these autonomous craft in the city of Guangzhou by the end of this year. Following this, the extended partnership should expand this deployment to other cities in their native country.
Pony AI did not provide any financial details, such as the impact on revenue or profitability, of this expanded arrangement. It did say that "the collaborative autonomous driving vehicle (ADV) fleet supply will be integrated in both Pony AI and Sunlight Mobility's platforms, making both parties share economic benefits and creating a win-win situation."
NASDAQ: PONY
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Doing what it does best
We can assume that Pony AI, one of the leading Chinese developers of self-driving vehicles, was able to negotiate at least fair terms for the expanded Sunlight Mobility partnership.
On that basis, this is almost surely a victory for the company, as shifting the manufacturing burden to its peer can not only conserve capital but also allow it to concentrate on developing technology. This absolutely feels like a win for Pony AI, although of course we have to wait to see how the collaboration is actually implemented to get a better idea of how it'll benefit.
