Toyota invested $400 million in Pony.ai to strengthen its ties with the Chinese provider of driverless-car systems.
The investment extends the companies’ partnership formed last year and pushes Pony.ai’s valuation to more than $3 billion, the startup said in a statement. The pact enables a “deeper integration” of Pony.ai’s technology with Toyota’s vehicles.
“It will enable us to make the commercialization of autonomous-driving vehicles faster,” Pony.ai CEO James Peng said in an interview with Bloomberg TV. “We will put more money into building up the fleet.”
Pony.ai is focusing on achieving "Level 4," or fully autonomous standards, in which the car can handle all aspects of driving in most circumstances with no human intervention. The latest funding will support Pony.ai's future robotaxi operations and technology development, sources told Reuters.
The investment by Toyota comes at a time when global automakers, technology firms, start-ups and investors, including Tesla, Alphabet's Waymo and Uber, are pouring capital into developing self-driving vehicles.
Over the past two years, 323 deals related to autonomous cars raised a total of $14.6 billion worldwide, according to data provider PitchBook, even amid concerns about the technology given its high cost and complexity.
For Pony.ai, a relationship with Toyota is a vote of confidence as it seeks to take on U.S. rivals such as Alphabet’s Waymo.
Pony.ai has two testing sites in California and it runs a pilot service with Hyundai Motor in Irvine, Orange County, that provides rides to members of the public. On Wednesday, the company announced a service to City of Fremont employees, offering last-mile rides in its autonomous vehicles between a local transport hub and some of Fremont’s public buildings.
Toyota required no exclusive access to the technology and is open to Pony.ai partnering with other automakers, said Peng, a former executive at China's Baidu.
Last year, Toyota and Pony.ai announced a pilot project on public roads in Beijing and Shanghai, using Lexus RX vehicles and Pony.ai’s autonomous driving system. The companies now plan to explore further cooperation in mobility services.
Toyota, which sold more than 10 million cars globally last year, has invested in firms focused on autonomous driving and mobility services.
Its autonomous vehicle partnerships include a venture with SoftBank and an investment in robotaxi developer Uber ATG. Last year, it invested $600 million in Chinese ride-hailing giant Didi Chuxing and a new joint venture to develop mobility services.
Toyota has researched into autonomous driving technologies mostly through in-house engineers and this year will launch its first vehicle with autonomous highway driving capabilities, but it has been lagging rivals in bringing self-driving cars to market. It has taken a long view towards the technology, saying it will take decades for cars to drive themselves on roads.
Founded in 2016, Pony.ai’s investors also include Sequoia Capital China and IDG Capital. The total size of the newest funding round was $462 million, with existing investors putting in $62 million.
Reuters contributed to this report
