Chinese autonomous driving firm Pony.ai sees shares drop 12% in Hong Kong debut

China's Pony.ai connected Thursday saw its shares driblet implicit 12%, portion rival WeRide fell astir 8% arsenic the autonomous driving companies began trading successful Hong Kong.

Pony.ai and WeRide, which are already listed successful the U.S., raised 6.71 cardinal Hong Kong dollars (about $860 million) and HK$2.39 billion, respectively successful their archetypal nationalist offerings.

There has been increasing capitalist involvement successful autonomous technologies with WeRide and Pony.ai aiming to support gait with larger competitors specified arsenic Baidu's Apollo Go successful China and Alphabet's Waymo successful the U.S.

Pony.ai and WeRide, some headquartered successful Guangzhou, China, stated that funds would spell toward scaling efforts, and the improvement of Level 4 autonomous driving — a measurement of driving automation that does not necessitate quality monitoring oregon involution nether circumstantial environments. 

WeRide CEO Tony Xu Han told CNBC that proceeds from the latest fundraising would besides beryllium utilized to boost the company's artificial quality capabilities and information halfway capacity.

The listings successful Hong Kong travel arsenic the companies question to grow extracurricular of China, wherever they person already begun operating afloat autonomous robotaxis successful immoderate cities. 

The caller regions see the Middle East, Europe and Asian countries specified arsenic Singapore. They person yet to person afloat approvals to run their robotaxis successful astir of those regions.

In the U.S., some companies are aiming for a concern with California-based Uber to let them to deploy their robotaxis connected the firm's ride-hailing level aft receiving regulatory approval.  

However, their U.S. plans look headwinds arsenic earlier this twelvemonth the government finalized a regularisation effectively banning Chinese exertion successful connected vehicles, including self-driving systems. 

"With the uncertainty successful the markets astir the satellite and the information that determination would beryllium aggravated scrutiny connected a Pony oregon WeRide trying to participate the U.S. market, a dual listing is simply a batch astir hazard mitigation," said Tu Le, laminitis and managing manager astatine Sino Auto Insights. 

He added that the listings were besides an acknowledgement that it's gonna instrumentality a batch of superior and an endorsement of a marketplace extracurricular the U.S. for Pony.ai and WeRide to succeed. 

Pony.ai and WeRide's competing listings item a caller inclination of Chinese companies seeking dual listings successful Hong Kong, which has been a bounce-back twelvemonth for the city's IPO market.  

The companies received support from Hong Kong regulators to dual database successful mid-October. 

"For the HK banal exchange, clustering the listing astatine the aforesaid clip helps to reenforce capitalist cognition of HK arsenic a tech-hub for Asia-focused exertion companies," Rolf Bulk, equity probe expert astatine New Street Research told CNBC. 

In May, Chinese artillery shaper and exertion institution CATL completed a secondary listing successful Hong Kong, raising $5.2 billion successful the world's largest IPO truthful acold this year.

The increasing inclination emerges amid geopolitical tensions and regulatory uncertainty successful the U.S. 

According to New Street Research's Bulk, the Hong Kong listings for Pony.ai and WeRide volition assistance the companies summation entree to Asia-based superior and grow their beingness successful China and the region.

"However, it volition bash thing to beforehand the advancement of their exertion stack and regulatory approvals successful Western markets. If anything, gaining support successful Western markets whitethorn beryllium much challenging with a HK secondary listing," helium added. 

The listings could besides assistance the firms support up with competitors specified as Baidu's Apollo Go successful China and Alphabet's Waymo successful the U.S., which presently person larger fleets. 

"Pony and WeRide are close up determination among the planetary leaders," said Sino Auto Insights' Le. "WeRide has diversified their work portfolio a spot much but they some spot Uber and the Middle East arsenic 2 viable partners successful their quality to get much pilots launched extracurricular of China."

"Investors should wage peculiar attraction to however their exertion evolves with AI and different caller tools becoming much mainstream," Le said.

— CNBC's Elaine Yu contributed to this report.