China’s self-driving car hopefuls Pony.ai and WeRide stumbled on their first day of trading in Hong Kong, reflecting investor caution over the high capital requirements and regulatory uncertainties clouding the global autonomous vehicle sector. Pony.ai’s shares slid 14%, while WeRide lost nearly 12%, even after raising substantial funds to accelerate their international expansion and AI development initiatives.

The tepid debut highlights broader investor unease over the future of China’s autonomous driving ecosystem, as firms like Baidu’s Apollo Go and Alphabet’s Waymo dominate the sector. Despite government support and strong domestic demand, the technology’s slow commercialization and policy headwinds have weighed on sentiment.

A Tough Start in Hong Kong’s Tech Comeback

Pony.ai raised HK$6.71 billion ($860 million) and WeRide collected HK$2.39 billion ($305 million) in their respective offerings, both joining a wave of Chinese tech listings seeking refuge in Hong Kong amid deepening U.S.-China tensions. Yet, their dual debuts were far from smooth — a reminder that investor appetite for pre-profit AI and mobility ventures remains limited.

The listings come at a time when Hong Kong’s IPO market is showing signs of life after years of subdued activity. Analysts say the simultaneous debut of both companies was intended to project strength for the city’s technology sector, but weak first-day performance underscored investor wariness toward long-term profitability.

“While the Hong Kong Stock Exchange wants to position itself as a hub for future mobility and AI, these listings show that investors remain cautious about companies whose timelines to profitability are uncertain,” said Rolf Bulk, equity research analyst at New Street Research.

Still, the dual listings are strategically important. By tapping into Asia-based capital pools, Pony.ai and WeRide gain greater access to regional investors and state-backed funds, insulating themselves from Western scrutiny and potential U.S. sanctions on Chinese autonomous tech.

Global Expansion and Strategic Challenges

Both Pony.ai and WeRide are betting heavily on Level 4 autonomy — technology that allows for fully driverless operation under specific conditions. The companies said proceeds from the IPOs will fund AI software refinement, data center capacity, and global testing programs. Pony.ai CEO James Peng also outlined plans to develop “autonomous parking and charging” ecosystems, signaling a broader push toward end-to-end mobility solutions.

But their expansion beyond China is facing formidable barriers. The U.S. government’s recent rules banning Chinese technology in connected vehicles effectively shut the door on large-scale deployments in American markets. In Europe and the Middle East, regulatory approval remains slow and fragmented, despite growing demand for robotaxi pilots.

Industry analyst Tu Le, founder of Sino Auto Insights, said the Hong Kong listings are as much about risk management as capital raising. “With the uncertainty around global market access and geopolitical scrutiny, a dual listing helps reduce exposure to U.S. regulatory volatility,” he noted. “It also acknowledges that success in autonomous driving will require massive, sustained capital.”

Investor Sentiment and the Road Ahead

Despite the poor debut, analysts remain cautiously optimistic that both firms will benefit from China’s AI-driven industrial policy and global appetite for autonomous mobility. Partnerships with Uber and local authorities in Singapore and Dubai are under negotiation, potentially offering lucrative pathways to scale.

Still, the market will closely monitor how these companies handle mounting competition and geopolitical constraints. Without clear regulatory progress in Western markets, analysts warn that Hong Kong’s capital alone may not be enough to sustain long-term innovation or valuation momentum.

As the global race for self-driving supremacy intensifies, Pony.ai and WeRide must convince investors that their technology can transcend national borders — and turn massive R&D spending into commercial viability.