Pony AI Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Pony AI Inc.' 's fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded, and a webcast replay will be available on the company's investor relations website at ir.pony.ai. I will now turn the call over to your host, George Hsiao, Head of Capital Markets and Investor Relations at Pony AI. Please go ahead, George.

Thank you. This is George speaking. Hello, everyone. We appreciate you joining us today for Pony AI's fourth quarter and full year 2024 earnings call. Earlier today, we issued a press release with our financial and operating results, which is available on our IR website. Joining with me today on the call are Dr. James Peng, chairman of the board, co-founder and chief executive officer, Dr. Tiancheng Luo, director, co-founder and chief technology officer, and Dr. Liu Wan, founding member and chief financial officer. They will provide prepared remarks followed by a Q&A session. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Further information regarding these and other risks and uncertainties is included in the relevant public filings of the company as filed with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Please also note that Pony AI's earnings press release and its conference call include discussions of both unaudited GAAP information and unaudited non-GAAP financial results. For reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to Pony AI's disclosure document available on our IR website. I will now turn the call over to our chairman, co-founder, and CEO, Dr. James Peng. Please go ahead.

Thanks, George. This is James Peng, founder and CEO. We consider this is an exciting time for Pony AI as we report our first earnings results as a public company. Our NASDAQ listing marks a significant milestone and is timed perfectly with the imminent mass commercialization of our robo taxi services. With ample financial resources now available, we are well positioned to lead and capitalize on the upcoming large-scale rollout of robotaxis, making this year an inflection point for the widespread adoption of autonomous transportation solutions. We are taking robotaxis first, China first, and the Tier 1 cities first approach. This is our current focus. is on scaling robo taxi operations in China, which not only generates sizable recurring revenue, but also offers a solid foundation for further expansion into various global markets. China's online ride-hailing market is exceptional. The country's tier one cities, mainly Beijing, Guangzhou, Shanghai, and Shenzhen offer a unique combination of demand, consumer readiness, and regulatory clarity, making them ideal for large-scale robo-taxi deployment. We estimate each city can easily support a fleet of over tens of thousands of robo-taxis. With technology that meets regulatory standards and backed by the fully driverless fare charging licenses, we have already secured. We are all ready for quick scale up. Launching large fleet in tier one cities will enable us to validate our business model, optimize our operations, and establish these markets as a benchmark and a scalable framework for future growth, either into other Chinese cities or extends to international markets. Next, I will explain why we anticipate our global taxi service will soon achieve mass commercialization. First and foremost, we have achieved technological readiness for mass commercialization. Our operational records proved that our Robotaxi has achieved level 4 driverless operation 24-7 in all weather conditions, making it commercial ready. Our technology is empowered by Virtual Driver and the World Model. The Virtual Driver is a comprehensive full-stack system proprietary software and hardware. This enables us to collaborate effectively with automakers and transportation network companies, we call them TNCs, to create a scalable robotaxi business model. Additionally, our generated Pony World model treats our virtual driver to be much safer and better than an expert human driver through advanced reinforcement learning. Our pony world simulates a wide range of scenarios, including extreme cases and the long tail events. By employing a training method called learn by practicing, our virtual driver does not just know what to do, it actually understands the reasons behind its actions. This is quite different from imitation learning that is widely used for the typical L2 systems. Because the L2 systems imitate the driving patterns of human drivers, they can only reach human level safety. In contrast, Pony World has improved our virtual driver's safety by 16 times, while at the same time significantly improving its comfort and the driving efficiency. Our safety record enabled our commercial insurance costs per robo-taxi to be reduced to almost half that of the traditional taxis. We have established strong relationships with local governments and secured the required policy approvals for large scale commercialization. We have obtained all the most advanced licenses in China's tier one cities. For instance, in recent weeks, Pony AI launched paid robot taxi service that connects key transportation hubs such as Beijing South Railway Station, Beijing Daxing Airport, and Yizhuang District, with plans to gradually expand to Beijing City Center. Moreover, in February this year, we launched paid robotaxi services in Guangzhou City Center, Guangzhou Baiyun International Airport, and Guangzhou South Railway Station. We are the first and owning company approved to provide robo taxi services on these high demand routes. Moving forward, we'll gradually expand our operations in these cities, paving the way for future growth. Third, we have built extensive mass production partnerships to support large scale commercialization. For example, in the first half of 2024, we established a joint venture with Toyota. As part of the deal, we will roll out mass production of the robotaxis based on BZ4X, as well as build the value chain of autonomous driving operations, including maintenance, charging, and other aspects. In addition, in the second half of 2024, We respectively reached mass production partnerships with BAIC New Energy, that is Beijing Auto, and the GAC Group, that is Guangzhou Auto. Based on the BAC ArcFox Alpha T5 models and the GAC Ion models, we carried out cooperation in the mass production of auto-grade autonomous driving kits, vehicle model production redundant safety design of the chassis and some other areas. These partnerships have been reinforced through strategic equity investments from all these three OEMs. All three upcoming Robotaxi vehicles are based on our seventh generation autonomous driving systems. This latest generation has achieved a major breakthrough in cost efficiency, reducing unit bomb cost by over 70% compared to the previous generation, with further cost reduction anticipated as we scale up. Fourth, we have fortified our operational capabilities to support the ramp up of fleet size and accommodate fast-growing user demands. We have developed our own ride-hailing platform, which is called Pony Pilot, and forged strategic partnership with leading DSCs, such as On-Time Mobility and Alipay, to offer driverless robotaxi services. In the fourth quarter of last year, we also established a partnership with Alibaba's online mapping and ride-hailing platform, AMAP, and integrated our Robotaxi service into its mobile app and meeting programs, making our services more accessible to the public. In 2024, the average daily orders per vehicle reached 15, and in Q1 2025, we continue to see the growth of daily orders per vehicle. with significant progress have been made in all the four pillars of autonomous driving. That is technology, regulations, mass production, and large-scale operation. We do see that a critical inflection point for mass commercialization is right in front of us. Now let's look at our robot truck business. which we have also seen significant growth in 2024. We deepened our joint venture with Final Chance, transforming it into a comprehensive autonomous driving transportation as a service platform. Together, we'll continue building a smart, efficient, safe, and environmental-friendly logistics road transport network while further expanding our robotruck fleet. A major milestone that highlights our leadership in robotruck business is our approval as the first company in China to conduct robotruck driver-out platoning on cross-provincial highways linking Beijing, Tianjin, and Hebei Province. With only the leading truck requiring a safety operator and the following trucks to be fully driverless. Testing has already begun on the Beijing-Tianjin Tanggu Expressway, making a significant step towards full autonomy for all trucks in the Platon, which will further reduce logistics costs and accelerate commercialization. In summary, Our transition to a public company marks the beginning of an exciting new chapter. We stand at a defining moment as we move toward the large-scale commercialization of autonomous mobility and continue to gain momentum, building on a solid foundation of technological advancements, regulatory support, and industry partnerships. Looking ahead, Our priority for this year is clear. Accelerating the mass production and the deployment of our seventh generation Robotech fleet. Further reducing the unit bomb cost and expanding operation areas and density in China's tier one cities. With that, I'll now pass it over to our CTO, Dr. Tiancheng Luo to review our technological progress. Tiancheng, please go ahead.