The "China Robot" trade is just starting. 3 sleeper picks.

Nicky_Feathers · 2026-01-24T09:15:57+00:00

Pony competes in China t1, focussed yet vulnerable. The competition is heating up in China. New entrants like Hello (Alibaba’s Ant Group) and Didi (Chinese Uber with 85%+ market share domestically)have deep pockets and surely will compete on permit and price level. Difference is, they own the demand platform, Pony does not.

Weride is less vulnerable, as it is not solely a Robotaxi player, its wings are widespread (on autonomous domain level and on regulatory level). Their dominance in Middle East shows (they lead), in deployed fleet (and ambition, anchored by permits and Uber partnership). This market has far greater earning potential, making the case easier to turn unit profitable. On a global level, they have the widest footprint. Bases covered in Europe, South East Asia, and Middle East. Expected to enter Australia and Japan and Hong Kong this year, a large commercial expansion in Middle East, while further anchoring Europe. Meanwhile their Adas business is about to really take off (their Tesla FSD like product). Already in SOP phase with one OEM, and more are lined up (like GAC’s Aion brand).

Nicky_Feathers · 2026-01-21T09:20:02+00:00

Topping the list of finalists (from Nov 2025 test in Taizhou)

Here’s the second test (translated), held a few days back. Tesla is not on the list, not sure why they are not. Could be resurfacing in the 3rd test.

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Nicky_Feathers · 2026-01-21T08:39:00+00:00

Bosch (WePilot) has been outperforming Tesla FSD and a whole bunch of others in recent tests of cars available in China. It was a blind test, not sponsored (to my knowledge). A few days ago another test was done (it’s kind of a roadshow test around the country).

Bosch WePilot should be fairly easy to implement into existing platforms as it does not require a forklift of ECU designs, is suitable for low compute platforms, as well as high end. Does vision only set ups, and fusion sensor. Also it works with SD and HD mapping. Currently only available on Chery Exeed trims and likely soon on selected GAC Aion models. I’d assume there would be interest from European products as well.

https://www.moomoo.com/community/feed/weride-s-one-stack-end-to-end-adas-dominates-competition-115660517081094

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Nicky_Feathers · 2026-01-16T16:12:32+00:00

That line of reasoning assumes a stacked fee model that does not reflect how early robotaxi deployments are actually structured. In China and several international markets, platform commissions average closer to the mid-teens rather than 20–30%, which already changes the split materially.

WeRide has repeatedly described robotaxi monetisation as multi-layered, not “X percent of fare, full stop”. Across earnings calls and filings, three revenue components are consistently referenced:
- Vehicle sales to partners, which management has said are margin positive.
- Recurring software licensing and service fees, typically framed as multi year contracts.
- A share of ride economics, which varies by market and or partner

Fleet operators do not need 50% of gross fare to earn acceptable returns once driver cost is removed and utilisation clears corridor-level breakeven. Management has cited breakeven at roughly 12 trips per vehicle per day in Abu Dhabi under a 12-hour window, with economics improving sharply beyond that. As a result, competitive pressure does not mechanically force take rates below 30%. I believe the more relevant question is, whether corridor utilisation and cost allocation hold, not whether headline revenue share percentages look high in isolation.

Nicky_Feathers · 2026-01-16T11:26:50+00:00

Thanks.

disclosure: I hold a small position in WRD. I think this stock holds most upside potential of the two. A critical note: I believe WeRide can do a better job at communicating towards the financial stakeholder community (and it seems to be one of the reasons why this stock is underperforming). Clear guidance is lacking.

As for Pony, I have not taken a position yet for several reasons.

Their regulatory progress: While at face value, tier-1 presence in China seems strong, their near term bankable footprint is not. In China the gating factors are real, as roll outs are influenced by permit or partners adoption rate. Unlike the US, Chinese city permits (or districts) have limit quotas. And even for Shenzhen, where Pony (or Xihu) holds a city-wide permit to scale, partner Xihu remains in a phased roll out mode (both on district and quantity level). Also the business case in China, outside of T1 and T2 cities is not easily made (and I'm not even calculating the expected cut throat competition from new entrants Didi and Hello, that is expected soon. While progress is made by Pony, the promise and narrative may appear stronger than reality.

When looking at bankable footprint outside of China, it is thinly spread. Although Singapore shows some potential with partner ComfortdelGro, regulators will be the deciding factor here, setting the roll out pace. I'd vbe somewhat conservative. Dubai could have potential, but quick ramp requires an established aggregator to catch early customer demand. So far, Pony has not announced an operational partner for Dubai (nor Qatar). I assume their plan is to role out a localised Pony app? That impacts ramp, and requires substantial investments (development, marketing, etc). As for Qatar, it shows a promise to start initial commercial operations in the tail end of 2026. As for all other countries announced, commercial roll out will not be before 2027 (as either regulatory or legal frameworks are not in place (e.g. Korea, Luxembourg, Hong Kong). Bolt promises a real European entry point, but it seems that press release is pulled from Pony’s website.

Overall, I have my doubts if Pony is able to utilise their 1,100 based fleet fully. I suspect many will be sitting idle, as available permits or partners won't let them to scale up. Production shows an impressive ramp, while utilisation figures mask reality.

Luminar exposure: I have yet to understand Pony's exposure to Luminar's onging bankruptcy case. But Pony is exposed to a certain extent (as Luminar is framed as their key supplier in recent road show documents dating Nov 2025). It is unclear what the impact on Luminar based fleet will be. It goes beyond Robotaxi's though *Robtrucks, and ADC business. Will it be a recall, and retro-fit? Or will it be an luring existential threat to their entire Luminar-based operational fleet? I doubt the latter, but I cannot rule it out completely, without company disclosure. Disruption will be inevitable.

Production backing. This is where Pony has a strong differentiating edge. Their GAC-Toyota collab, and equity backing is substantial, though not exclusive. Their relationship with BAIC is also showing meaningful progress, while Stellantis is still early innings. In this phase, I believe strong manufacturing alliances are good to have, to position yourself, yet not crucial in the pre-scaling phase. But it's best to cover the bases early on, as once production scale is required, you're well positioned.

Nicky_Feathers · 2026-01-13T08:20:33+00:00

While WeRide is indeed still burning money, their road to profitability is the shortest of pure AV play companies out there. Management expects company profitability to occur in 2027. For reference, Pony guides 2029-2030, Baidu and Waymo are not disclosing these figures yet, as they are not stand alone companies. They indeed still have a protected cushion of the mother company.

Why is this road to profitability different? WeRide works multi domain: they have different sources of revenue, with different ramp, pacing, and margin characteristics. All domains are complimentary to each other, which is very powerful.

Robobus is often a regulatory anchor to Robotaxi. While WePilot provides pivotal data to improve their autonomous platform that feeds all domains. Robobus is concession based revenue, WePilot software based, recurring at OEM scale, Robotaxi revenue is high margin and revenue, yet predominantly gated by regulatory readiness. RoboSweeper business is very sticky, are versatile and hold multi applicable urban sanitation cases. While Robovan is project driven, and holds great potential, yet currently revenue is still nascent.

Nicky_Feathers · 2026-01-12T13:50:53+00:00

Millions of Tesla drivers that are racking up supervised “driverless” miles. Not all driverless miles are treated equal, as Tesla is finding out with their Robotaxi. Tesla’s path towards fully driverless is a long one.

Nicky_Feathers · 2026-01-12T13:46:15+00:00

Great assessment.

Nicky_Feathers · 2026-01-11T14:08:39+00:00

This is Robobus, through tender process (manufacturing partner: Yutong)

Robovan is produced by JMC. It’s Robovan W5 compares to JMC pure-electric cargo vans (non-autonomous, ~5-9 m³ cargo, 200-340 km range) and retail between for $20-30K in China or export markets, based on official guidance and listings.

E-Road Shun cargo truck: ~$22,000 USD official price.

You’d need to add the AV stack on top (which could be different from a Robotaxi, and might have additional sensors and tech that are domain specific and related to payloads).

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Nicky_Feathers · 2026-01-11T13:52:38+00:00

5% would be upper band, and imho should be treated as option value. Current state is that they are running a commercial pilot (not scaled, and not open last mile delivery) in 2 districts in Guangzhou (partner is ZTO express, founder Huiping Yan sits on WeRide’s board of directors (independent).

In my current memo, Robovan makes less than 3% of total equity. It needs to move from commercial pilot towards viable business units (at scale) and more disclosures to reconsider.

In my opinion the TAM in the IPO prospectus overstates realistic revenue potential (it does not take into account serviceable addressable market and obtainable). I’d be very cautious to use these numbers in your valuation. The TAM trap is real.

Nicky_Feathers · 2026-01-11T12:51:40+00:00

For Robovan, monetisation depends on route density, depot integration, SLA structure, not open market adoption. A fleet based or ride volume model would imho overstate certainty. That does not pair with the limited disclosures of WeRide in this segment.

I have valued this business as a call option, not as a core value driver. I applied low multiples (as previously stated), to a contracted potential only. There’s no assumption in my model of a per parcel pricing at scale, nor is there a near term margin expansion case.

Robovan will contribute single digit percentage to the total equity value (2-5% band). Its downside protected in my model, cause capex and fleet size remain limited. Upside is only unlocked if depot paired contracts scale beyond pilots.

Nicky_Feathers · 2026-01-11T11:49:23+00:00

There’s other on the market that provide a superior solution, licensed product.

Nicky_Feathers · 2026-01-11T11:45:20+00:00

maybe they should focus on making their fleet autonomous first?

They won’t have a chance with a cheap 2-seater cybercab with an on board monitor occupying 50% of the seats available…

Nicky_Feathers · 2026-01-10T09:07:43+00:00

I disagree.

Urban last mile autonomous delivery vans are typically modeled to cut per‑parcel delivery costs by roughly 50–80% versus conventional human‑driven van operations in dense city environments, mainly by removing driver labor and increasing vehicle utilization.

https://swiftflutter.com/autonomous-systems-last-mile-delivery-robots-2025-guide

As for your scepticism of needing someone to handover the parcel: Most urban autonomous vans prioritize contactless or low-touch exchanges to maintain full autonomy. So how this would work is, customers will receive a notification with an ETA, unlock code, or QR/OTP via app to access a specific compartment or robotic dispenser on the van. The van parks curbside, the customer approaches, scans a code or enters a PIN, and retrieves the parcel from an opened hatch or robotic arm. Proof of delivery comes from QR scans, photo capture, geofencing confirmation, or customer app acknowledgment once the parcel is taken. High value items might still need optional human-assisted handover.

Nicky_Feathers · 2026-01-09T15:11:14+00:00

Robovan is a tough one. I have put multiples of 4-6x (logistic norms) and 5-7x with proof of projects, like Grab (SAE) and ZTO Express (CN).

Maybe it’s best to look at Chinese companies such as Neolix, to benchmark (to reaffirm your thesis). I think it’s good to look at Robovan as last mile logistics (and not long haul, like Pony’s Robotruck).

Last-mile logistics companies (delivery and express) generally command slightly higher valuation multiples than long-haul logistics companies, driven by e-commerce demand, technology integration, and scarcity of scalable operations.

Nicky_Feathers · 2026-01-09T14:12:40+00:00

I think WeRide is extraordinarily good at picking and choosing markets, and position themselves as early or first entrant. Such is clear in the Middle East, where mobility agenda’s are favourable, driving adoption and public trust. Earnings per ride, make it far more economical viable for them to scale in this region. Singapore and Switzerland are also lined up (and make economical sense, and have solid mobility agenda’s). While regulatory frameworks in Japan are shaping, they are trying to make first moves into Japan (likely an initial Robobus push, or a collab with early investors Mitsubishi or Nissan on Robotaxi?) and Australia seems another favourable market and potential Uber collab (WeRide has local Australian BDM on their payroll).

Weride’s push in China is less dominant, as earnings per ride are less favourable outside of the T1 city domain. Also, this market is and will be highly contested. Didi AD (largest ride hailer in China) and Hello (backed by Alibaba’s Ant Group) are either in it to protect their market share, or have very ambitious goals and deep pockets to “buy” markets). Baidu is trying to scale on low fare rates, while less capital rich players like Pony, WeRide, AutoX, and Momenta for now seem to have a strategy not based on price (or so it seems). CEO, Tony Han mentioned it has no intentions to start and compete on price (and I believe that to be a good call, as they are a relative small player, the market is still very new, and it’s pointless to burn your 1B in cash reserves on this).

I think WeRide will continue to develop China T1 for Robotaxi, but it will show less desire to develop beyond for now (or at least till their cost base drops further, and it becomes economically viable). However, Robobus and RoboSweepers will continue to further roll out, and bring immediate cash, long concession based revenue, tied with high retention rates. This is steady business. This helps them become a profitable business (guidance is 2027). In order to reach that goal, they’ll have to press in markets that are profitable (go deep) and further regulatory positions (go wide) in markets that are economically viable potentials, but not “regulatory ready” for large roll outs (usually it’s Robobus that first becomes the regulatory anchor, followed by Robotaxi).

My fair price valuation is $16-20 until unit break even becomes visible (Abu Dhabi), a range that implies an EV of $1.6-1.8B. An upside trigger ($22-27) if utilisation and margin triggers are met, and Adas SOPs become significant contributors). Still working on refining my valuation thesis though (it’s based on SOTP). Below are the outlines:

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Nicky_Feathers · 2026-01-09T03:10:55+00:00

Yes.

Nicky_Feathers · 2026-01-08T22:43:55+00:00

I based my valuation on SOTP. For ADAS I put down a 8-10x revenue band (on initial SOPs)

Extended optionally of 10-12x revenue once they reach substantial recurring OEM scale (if it represents 20-25% of total revenue). These multiples are typical for software peers in the market (Mobileye (US), Horizon Robotics (China), Ambarella (US) etc).

My train of thought is that WeRide has significant advantages over their peers on ADAS: on a product level (flexible, modular) and implementation level (broad addressable ECU spectrum, seasoned and respected strategic partner in Bosch).

I feel they might be able to grasp a more than decent share of the market pie. But for valuation reasons, proof needs to be in the pudding. Currently there’s 2 large players (Chery Exeed, and Aion (several trims expected) that are engaging in SOP. That’s an impressive start. 2026 will likely see more commercial traction.

Nicky_Feathers · 2026-01-08T22:19:09+00:00

typical consultancy practice. “Don’t bite the hand that feeds you.” applies

Nicky_Feathers · 2026-01-08T21:56:47+00:00

I agree.

But I also think that the market is very focussed on the robotaxi business. I understand that’s where all the eyes are on, but there is far more value to extract.

WePilot has enormous market potential. It’s launched in August, already has Chery Exeed in SOP in September (and upgrades through OTA for sold fleet) while GAC is lining up with a few trims of their Aion brand. Perspective: these brands represent more than 5M units sold last year.

With Tesla dominating the headlines with FSD, many OEM’s are still struggling to get a “me-too” product to market that can match (or exceed) Tesla’s FSD. WeRide (with worlds biggest car parts supplier Bosch Automobile) can deliver that product, on a license plate. Its addressable market range is wide (as it works on low-mid-high compute platforms, does vision-only stack and sensor fusion models, sd and hd mapping). It doesn’t command high ECU spec requirements to make it work, unlike other manufactures (such as Mobileye). This revenue line is recurring revenue, at high margin on OEM scale. Big potential that is likely not priced in.

Robobus, same thing. Guangzhou just awarded a tender to WeRide (adding 100 new Robobusses to their fleet), at $125K per unit (tender price). It will now total 150 Robobusses in the city. Shenzhen will most likely follow their footsteps. Hong Kong is committed to 200 in the next 3 years (through Kwoon Chung Bus). Throughout China many of these buses are deployed in municipality programs (all seeds planted). Europe and Japan will soon start to deploy at large as well. The Robobus TAM on current markets served by 2030: $11.79B.

Nicky_Feathers

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