Robotaxi Companies That Can Navigate Capital Markets, Local Policy Would Be Winners — Market Talk

By William Gavin

November was only the third month this year in which Tesla reported sales growth in this major EV market

Tesla is on track to deliver 1.66 million electric vehicles in 2025, according to the FactSet consensus, well below its sales performance in 2024 and 2023.

Tesla Inc. enjoyed a rare month of growth in the world's biggest automotive market after new trims of its best-selling models drove demand.

The company sold 86,700 China-made electric vehicles last month, according to preliminary data from the China Passenger Car Association. That's 10% more EVs than Tesla (TSLA) delivered in November 2024 and the company's second-best performance by units sold in 2025.

That's a good sign for Tesla, which has struggled to compete with rivals in the heavily contested Chinese EV market and has recorded year-over-year sales growth in only two other months this year. Overall, deliveries are down by more than 8% through November, according to CPCA data.

The gains come after Tesla introduced a new long-range rear-wheel-drive variant of its Mode Y sports utility vehicle in China last month, adding to its offerings in the market. Earlier this year, Tesla began selling a longer-range Model 3 sedan and a six-seater Model Y in China.

Tesla, like other EV makers, is benefiting from the expiration of a tax credit at the end of December. It's also offering a series of incentives that encourage customers to order their vehicles before the end of the month.

The push to grow sales in China comes as Tesla has struggled to compete with both emerging threats, such as Xiaomi Corp. (HK:1810), and industry leaders like BYD Co. (CN:002594). Some Chinese firms are also making inroads in Europe, which has helped erode Tesla's share of that market.

Its rocky performance abroad is part of why Tesla is expected to sell just 1.66 million EVs in 2025, according to FactSet estimates, compared with 1.78 million in 2024 and 1.8 million in 2023. Wall Street has pegged December-quarter sales at 450,000 units, a 9% decline compared with a year earlier.

Overall, November was a solid month for many carmakers in China.

At least seven sellers of new-energy vehicles - a category that includes all-electric vehicles and plug-in hybrids - achieved record sales, while six other companies came close to hitting their own records, according to CPCA Chair Cui Dongshu. Sales of new-energy vehicles grew 20% year over year to 1.72 million units, Dongshu said in a statement.

BYD was not among the record-breaking automakers. Tesla's biggest rival in China reported a 5% year-over-year drop for November, its third straight month of declines.

-William Gavin

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

By Jack Denton

Alibaba stock was falling on Friday following a recent report that the company could be among those included on a Pentagon watchlist — a reminder of regulatory horrors that haunted the shares for years.

Alibaba's American depositary receipts, or ADRs — essentially the company's U.S.-listed shares — were down 1% in early U.S. trading on Friday.

The decline followed news late Wednesday that the Pentagon told Congress that Alibaba should be added to a list of companies that aid the Chinese military, Bloomberg reported, citing a letter to Congress which it said it viewed.

It is not yet clear if Alibaba and other companies, including Baidu and BYD, have yet been added to the "1260H" Pentagon list of Chinese military-linked companies, the report added.

The story was re-reported in other outlets widely on Thursday, when U.S. markets were closed for the Thanksgiving holiday.

Congress was notified of the Pentagon's conclusions on Oct. 7, a few weeks before breakthrough trade talks between President Donald Trump and his Chinese counterpart Xi Jinping, according to the Bloomberg report.

A 1260H designation would not constitute a ban of sorts for Alibaba and others, but would mark a hit to the company's reputation and could raise general regulatory risks for U.S. investors and prospective clients.

"There's no basis to conclude that Alibaba should be placed on the Section 1260H List," Alibaba said in a statement.

"Alibaba is not a Chinese military company nor part of any military-civil fusion strategy," the company added. "We further note that, because Alibaba does not do business related to U.S. military procurement, being on the Section 1260H List would not affect our ability to conduct business as usual in the United States or anywhere in the world."

A Baidu spokesperson said in a statement that "there is no credible basis for adding Baidu to the 1260H list or any other U.S. government list of restricted companies."

"The suggestion that Baidu has military connections is entirely baseless and no evidence has been produced that would prove otherwise. Our products and services are designed for civilian use. Were the company to be formally listed, we would not hesitate to use all options available to us to have the company removed from the list as many have successfully done in the past," the spokesperson added. "As we are not a supplier to the U.S. military, this potential listing would have no material impact on our business."

Barron's has reached out to BYD for comment. Baidu stock was up 0.6% on Friday. Shares in BYD are not traded in the U.S. on main exchanges but rather over-the-counter markets.

For Alibaba investors, Pentagon watchlist talk is, more than anything else, a reminder of the potentially devastating power of regulatory risks for the stock.

Shares in the company have been on a roll, up 85% this year to the highest levels since 2021 — helped by a meaningful pivot to artificial intelligence — but the stock continues to trade at around half its late-2020 peak.

In late 2020, Alibaba became the face of a regulatory crackdown on the tech sector by Beijing, which was compounded by regulatory pressures in the U.S. The stock fell and then stagnated, seemingly relentlessly, for years, before a rebound began in earnest in late 2024.

Investors will be hoping days of regulatory pain are over — and momentum in the stock would suggest they are. But even reminders of the risks that remain for Chinese tech names may be enough to shake confidence.

Write to Jack Denton at jack.denton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Pony AI will likely turn profitable in 2028, UOB Kay Hian analysts write in a note. The company's coming earnings will be driven by robotaxi fleet expansion and hardware cost reduction, they say. The company's fleet expansion will help boost its gross margin. Meanwhile, Pony AI's management expects a further 20% cost reduction next year, which will also help support the company's profitability. Pony AI's pivot to an asset-light method and collaboration with Sunlight Mobility will also help support the company's earnings growth, they add. UOB Kay Hian maintains its buy rating on the stock with target prices at $26.10 and HK$203.60. Shares last at $13.45 and HK$107.00. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

Pony AI will likely turn profitable in 2028, UOB Kay Hian analysts write in a note. The company's coming earnings will be driven by robotaxi fleet expansion and hardware cost reduction, they say. The company's fleet expansion will help boost its gross margin. Meanwhile, Pony AI's management expects a further 20% cost reduction next year, which will also help support the company's profitability. Pony AI's pivot to an asset-light method and collaboration with Sunlight Mobility will also help support the company's earnings growth, they add. UOB Kay Hian maintains its buy rating on the stock with target prices at $26.10 and HK$203.60. Shares last at $13.45 and HK$107.00. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

Pony AI will likely reach single-unit economics breakeven across its Gen-7 robotaxis in 2026, and for its entire robotaxi fleet in 2027, when its fleet size ramps up to 10,000 units, Daiwa analysts write in a note. The company has extended its cooperation with Sunlight Mobility, a ride-hailing service operator, to lease robotaxi vehicles and pursue an asset-light model, they say. Daiwa expects Pony AI to hold the majority of its vehicle assets itself until end-2027. China's robotaxi industry will also face more competitors next year, including XPeng and Didi. In the short term, more competitors will likely bring more pros than cons for Pony AI, as the company could provide regulators with data at scale and accelerate permits, zone expansion and the establishment of standards, they say. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

Uber has taken another step in its global autonomous strategy by activating fully driverless rides in Abu Dhabi, using WeRide’s technology to anchor its Middle East expansion.

The service went live on Wednesday and makes the United Arab Emirates capital the first city in the region where Uber is offering a completely driverless robotaxi.

The launch forms part of Uber’s wider plan to scale its autonomous partnerships across continents.

It also reflects how the company is blending different regional trials in the US, China, and the Middle East into a larger network of robotaxi operations.

Middle East deployment

Riders in Abu Dhabi can now request a WeRide robotaxi when booking an UberX or Uber Comfort ride.

This is the first time Uber has offered a fully driverless service in the Middle East, after beginning supervised autonomous trips with an operator on board in the city last December.

That phase followed the formalisation of the Uber and WeRide partnership in September 2024.

The companies also extended their autonomous testing across the region earlier, launching robotaxi rides with a safety operator in Riyadh in October.

Abu Dhabi is the first location where the collaboration has progressed to the driverless stage.

Global partnerships widen

Uber has been steadily expanding its robotaxi presence across the US.

It began offering autonomous rides in Phoenix in late 2023 and later added Austin and Atlanta.

The company announced in July that it had signed a six-year robotaxi agreement with electric vehicle firm Lucid and autonomous driving startup Nuro, giving it more partners and more vehicle types as it builds a larger autonomous ecosystem.

This multi-partner structure is now central to Uber’s approach, allowing it to enter new markets without manufacturing its own autonomous vehicles.

China’s influence in the rollout

WeRide’s participation in the Abu Dhabi launch shows China’s growing role in global autonomous transport.

The Nasdaq-listed company already operates full driverless robotaxi services in Beijing and Guangzhou, according to its website.

The Abu Dhabi deployment now adds another international test environment to WeRide’s portfolio.

In May, Uber said it would expand the WeRide service to 15 more cities over the next five years, including European locations.

The shift to a fully driverless service in Abu Dhabi gives WeRide a new benchmark outside China and sets the stage for broader commercial adoption across multiple regions.

Service features on Yas Island

Uber said the driverless vehicles will operate within specific zones around Yas Island.

Riders have the option to increase their chances of receiving a robotaxi by selecting the autonomous choice in the app before booking.

The ride experience includes access to support through the Uber app and through a tablet placed inside the vehicle, allowing riders to seek assistance if required at any point in the journey.

While Uber has not disclosed how revenue from robotaxi trips is shared between partners, the company continues to use each market to study rider behaviour, service demand, and operational efficiency.

The growing competition in autonomous transport is also shaping expansion plans.

Lyft announced in September that it had signed a deal with Waymo to bring robotaxis to Nashville next year.

With more companies preparing multi-city rollouts, the sector is shifting from testing stages to broader deployment.