Is it time to revisit FSD related stocks? 

With$Tesla Motors(TSLA)$  rolling out robotaxis trial in Austin, Texas, $BYD COMPANY(01211)$  announcement of FSD in their complete lineup, commercial FSD stocks like $WeRide Inc.(WRD)$  and$Pony AI Inc(PONY)$ are back in play. 

WeRide announced a wider partnership with Uber in 15 additional cities and Tencent-backed PonyAI announced partnerships with Uber to rollout self driving services in Middle East. 

Price wise, WeRide share has retraced from an all time high of $$44 to a recent low of $6. It rebounded strongly on the news of the Uber partnership to close at $9, up $31%.

PonyAI, retraced from it's recent high of $23.88 to a low of $4.11, rebounding strongly to $14.32, 47%, on the same news. 

I am long WRD and looking to add PonyAI on retracement. I believe Tesla's robotaxis rollout will shine the light on these two stocks in June. 

Let's dwelve into the technology of FSD. 

Full Self-Driving (FSD) Technology: How WeRide, Pony AI, and Tesla Are Monetizing the Autonomous Driving Revolution

The race to develop Full Self-Driving (FSD) technology—a system enabling vehicles to navigate roads autonomously without human intervention—is reshaping the automotive and mobility industries. FSD promises safer roads, reduced traffic congestion, and new business models like robotaxis and autonomous logistics. Companies like WeRide (NASDAQ: WRD), Pony AI (NASDAQ: PONY), and Tesla (NASDAQ: TSLA) are at the forefront, but their approaches to FSD and monetization strategies differ significantly. This article explores FSD technology, how these companies are leveraging it to generate revenue, and the competitive dynamics between specialized autonomous vehicle (AV) developers and traditional automakers.

What is Full Self-Driving (FSD) Technology?

FSD refers to Level 4 or Level 5 autonomous driving, as defined by the Society of Automotive Engineers (SAE). Unlike lower levels (e.g., Level 2, where systems like Tesla’s Autopilot require human supervision), FSD enables vehicles to operate independently in most or all conditions. Key components include:

Sensors: LIDAR, radar, cameras, and ultrasonic sensors to perceive the environment.

AI and Machine Learning: Algorithms process sensor data to make real-time driving decisions.

High-Definition Mapping: Precise maps guide navigation in complex urban settings.

Connectivity: Vehicle-to-everything (V2X) communication enhances safety and coordination.

FSD’s potential spans passenger transport (robotaxis), logistics (autonomous trucks and vans), and public transit (robobuses). However, monetizing FSD is challenging due to high R&D costs, regulatory hurdles, and the need for scalable business models.

WeRide (WRD): Scaling Autonomous Mobility and Logistics

Business Model

WeRide, a Chinese AV leader, focuses on Level 4 autonomy for diverse applications: robotaxis, robobuses, robovans, and robosweepers. Its monetization strategy centers on commercial mobility services and partnerships, rather than selling vehicles to consumers.

Robotaxi Services: WeRide operates paid robotaxi fleets in cities like Guangzhou and Beijing, generating revenue per ride. Its partnership with Uber (NYSE: UBER) integrates WeRide’s robotaxis into Uber’s app, targeting 15 new cities globally over five years. This ride-hailing model leverages high utilization rates to drive revenue.

Robobus and Public Transit: WeRide’s robobuses provide autonomous shuttle services in urban areas, contracted by municipalities or private operators. For example, its paid robobus service in Guangzhou’s city center caters to commuters.

Logistics and Delivery: The Robovan W5, a Level-4 autonomous delivery vehicle, targets last-mile logistics for e-commerce and retail. WeRide earns revenue through delivery contracts or leasing these vehicles to logistics firms.

Technology Licensing: WeRide licenses its FSD software and hardware to partners like Renault Group, generating additional income from B2B deals.

Financial Performance

In Q4 2024, WeRide reported $19.3 million in revenue, primarily from robotaxi and robobus operations. However, the company remains unprofitable due to heavy R&D and scaling costs. Its $500 million cash reserve supports expansion, but profitability is likely years away.

Competitive Edge

Market Leadership in China: WeRide benefits from China’s supportive AV policies and massive urban markets, giving it a head start in commercialization.

Diverse Portfolio: Unlike automakers, WeRide’s focus on multiple vehicle types (taxis, buses, vans) diversifies revenue streams.

Global Ambitions: Partnerships with Uber and European permits (e.g., France, Spain) position WeRide for international growth.

Challenges

Regulatory hurdles in Western markets could delay global expansion.

Ongoing losses and stock volatility (weekly volatility rose from 25% to 31% in 2024) pose risks for investors.

Pony AI (PONY): Cost-Efficient FSD for Robotaxis and Trucking

Business Model

Pony AI, another Chinese AV pioneer, develops Level 4 FSD systems for robotaxis and robotrucks. Its monetization strategy emphasizes cost efficiency and strategic partnerships to scale services.

Robotaxi Fleets: Pony AI operates paid robotaxi services in Chinese cities like Beijing and Shenzhen, generating per-ride revenue. Its partnership with Uber integrates Pony’s robotaxis into Uber’s platform, expanding its reach.

Autonomous Trucking: Pony’s robotrucks target freight transport, a high-demand sector. Contracts with logistics firms provide steady revenue, leveraging FSD to reduce driver costs.

Consumer Integration: A collaboration with Tencent integrates Pony’s robotaxis into WeChat, allowing users to book rides via the app. This boosts accessibility and ride volume.

Technology Development: Pony’s seventh-generation FSD system, unveiled at the 2025 Shanghai Auto Show, is 70% cheaper to produce than predecessors. While not yet licensed, this cost advantage could enable B2B sales or lower operating costs.

Financial Performance

Pony AI reported $75 million in revenue for FY2024, driven by robotaxi and trucking operations. Like WeRide, it incurs significant losses due to R&D and fleet expansion, but its $825 million cash reserve supports growth. The stock surged 150% in early 2025, reflecting investor optimism.

Competitive Edge

Cost Efficiency: Pony’s low-cost FSD system could disrupt competitors, enabling competitive pricing for robotaxi rides or trucking services.

Strategic Partnerships: Ties with Tencent and Uber enhance scalability and user adoption.

Dual Focus: Robotaxis and trucking diversify revenue, balancing consumer and industrial applications.

Challenges

A securities class action inquiry adds legal risk, potentially impacting investor confidence.

Competition from WeRide and global players like Waymo intensifies in China and beyond.

Tesla (TSLA): FSD as a Premium Vehicle Feature and Future Robotaxi Play

Business Model

Tesla, a leading electric vehicle (EV) manufacturer, integrates FSD into its consumer vehicles as a premium software option. Its long-term vision includes a robotaxi network, but current monetization is vehicle-centric.

FSD Software Sales: Tesla offers FSD as a $12,000 one-time purchase or a $99–$199 monthly subscription for its EVs. This generates high-margin software revenue from millions of Tesla owners.

Vehicle Sales: FSD enhances Tesla’s brand and drives EV sales (386,810 vehicles delivered in Q4 2024). The promise of future FSD capabilities justifies premium pricing.

Data Advantage: Tesla collects driving data from its fleet, refining FSD algorithms. This proprietary data is a long-term asset for robotaxi development.

Robotaxi Ambitions: Tesla aims to launch a robotaxi service, potentially using a dedicated “Cybercab” vehicle. However, this remains speculative, with no clear timeline as of May 2025.

Financial Performance

Tesla’s market cap (~$884 billion) dwarfs WRD and PONY, reflecting its EV dominance. While specific FSD revenue isn’t disclosed, software margins are high. Tesla’s Q1 2025 deliveries fell to 337,000, the lowest since 2022, partly due to brand controversies, but its scale ensures financial stability.

Competitive Edge

Massive Scale: Tesla’s global fleet provides unparalleled data for FSD development.

Consumer Base: Millions of Tesla owners are potential FSD subscribers, creating a recurring revenue stream.

Vertical Integration: Tesla controls hardware, software, and manufacturing, reducing reliance on third parties.

Challenges

Delayed Robotaxi Rollout: Tesla’s FSD is still Level 2+, lagging behind WeRide and Pony’s Level 4 deployments. Regulatory approval for robotaxis remains uncertain.

High Valuation: At 135 times forward earnings, Tesla’s stock is priced for perfection, limiting near-term upside.

Brand Risks: Controversies linked to CEO Elon Musk have hurt Tesla’s reputation, impacting demand.

WeRide and Pony AI: Service-Oriented Models

Both WeRide and Pony AI prioritize commercial mobility services, generating revenue from fares or contracts. Their Level 4 FSD systems are deployed in real-world settings, giving them a head start in monetizing autonomous transport. Partnerships with Uber and Tencent amplify their reach, while China’s AV-friendly policies accelerate deployment. However, their focus on services limits near-term profitability, as fleet expansion and R&D costs are substantial.

Tesla: Consumer and Hardware-Driven

Tesla’s FSD monetization is tied to its EV ecosystem, with software sales and subscriptions driving high-margin revenue. Its consumer-focused model leverages an existing customer base, avoiding the capital-intensive fleet operations of WeRide and Pony AI. However, Tesla’s slower progress toward Level 4 autonomy and reliance on future robotaxi plans make its FSD revenue less immediate than its competitors’ service-based models.

Market Trends and Future Outlook

China’s Dominance: China’s urban density and government support make it the epicenter of FSD commercialization. WeRide and Pony AI are well-positioned to capture this market, while Tesla faces stiffer competition there.

Partnerships as Catalysts: Collaborations with ride-hailing platforms (Uber) and tech giants (Tencent) are accelerating FSD adoption, benefiting WRD and PONY.

Regulatory Landscape: The U.S. and Europe lag in FSD approvals, posing challenges for Tesla’s robotaxi ambitions and WeRide’s global expansion.

Investor Sentiment: X posts highlight strong enthusiasm for WRD and PONY, with their stocks surging on partnership news. Tesla’s FSD hype is tempered by delivery declines and brand issues.

Conclusion: Who’s Winning the FSD Race?

WeRide and Pony AI are capitalizing on FSD through immediate, service-based revenue from robotaxis, robobuses, and logistics. Their Level 4 deployments and partnerships give them an edge in commercialization, particularly in China. However, their unprofitable operations and smaller scale carry higher risks. Tesla, with its massive consumer base and data advantage, generates significant FSD revenue today but lags in deploying true autonomous services. Its robotaxi vision is promising but speculative.

For investors, WeRide and Pony AI offer high-growth potential in the FSD space, with analysts projecting 100–175% stock upside. Tesla remains a safer, long-term bet but faces near-term challenges. As FSD technology matures, the interplay between specialized AV developers and automakers will shape the future of mobility.

Disclaimer: This article is for informational purposes only and not financial advice. Investing in stocks involves risks, and past performance does not guarantee future results. Conduct your own research or consult a financial advisor before making investment decisions.

$WRD 20250516 10.0 CALL$