Two of China’s top driverless car companies, Pony.ai and WeRide, have applied to list their shares in Hong Kong. This marks a major step for China’s autonomous vehicle (AV) industry as it seeks global recognition and funding. The twin IPO filings show how far the country’s robotaxi and self-driving technologies have advanced, and how investors are beginning to take them seriously.
IPO Details and Plans: Billions at Stake in the Driverless Race
Pony.ai, based in Guangzhou, plans to offer around 42 million Class A shares in its global offering, including a small portion to Hong Kong retail investors. The company’s maximum offer price is about HK$180 (roughly US$23) per share, which could value it at more than US$10 billion.
WeRide, also based in Guangzhou, aims to issue about 88 million shares at up to HK$35 each. Its total valuation could reach several billion dollars, depending on final pricing. Both listings are expected to take place on the Hong Kong Stock Exchange in early November 2025.
The filings follow regulatory approval from China’s securities regulator, which has been cautious about allowing tech companies to list abroad. Both firms are among the first autonomous-driving startups to receive the green light for an overseas IPO since 2023.
Why These IPOs Matter
The twin listings mark a turning point for China’s driverless tech sector. For years, companies like Pony.ai and WeRide relied on venture capital to fund expensive research and testing. Going public gives them access to new capital to expand fleets, build partnerships, and improve AI systems.
The move also reflects China’s growing ambition to lead in driverless mobility. While U.S. players like Waymo and Cruise have faced setbacks, Chinese developers are pushing ahead with pilot robotaxi services in major cities. Both Pony.ai and WeRide already hold licenses to operate driverless rides in parts of Beijing, Guangzhou, and Shanghai.
Public listings also help build transparency and investor confidence. For a young industry that has long been seen as futuristic and risky, IPOs show that companies believe they are close to commercial scale.
By the Numbers: Key IPO Metrics
Some of the main data points from the filings include:
- Pony.ai’s estimated valuation: Over US$10 billion.
- Pony.ai shares offered: 42 million Class A shares.
- WeRide shares offered: About 88 million shares.
- WeRide’s Q2 2025 revenue: ¥127 million (about US$18 million).
- WeRide’s Q2 2025 net loss: ¥406 million (about US$57 million).
While both firms continue to post losses, their revenue growth shows increasing demand for pilot robotaxi services and partnerships with automakers.
Company Background and Performance
Pony.ai was founded in 2016 and quickly became one of China’s most valuable AV startups. It operates driverless taxis, freight trucks, and test vehicles in China, the United States, and several other regions.
The company plans to expand its fleet from about 250 vehicles to over 1,000 by 2025. It has received investment from Toyota and other global carmakers.
WeRide was founded in 2017 and focuses on robotaxis, robobuses, and self-driving vans. It has already completed more than 30 million autonomous kilometers in testing and public operations.
In the second quarter of 2025, WeRide reported revenue of around ¥127 million (about US$18 million), up 60 percent from the same period last year. Despite the growth, it posted a net loss of about ¥406 million as it continues to invest in development.
Both companies face heavy competition from domestic rivals like Baidu’s Apollo Go and international peers such as Waymo, Motional, and Cruise. The key challenge for all is finding a clear path to profitability in a market where hardware, mapping, and AI costs remain high.
Robotaxis on the Rise: Market Forecasts and Growth Drivers
The global robotaxi market is still young but growing quickly. Analysts estimate that the total market value for autonomous driving services could reach US$60 billion to US$70 billion by 2030.
McKinsey estimates that advanced driving (AD) and driver-assistance (ADAS) systems could bring in US$300–400 billion each year by 2035. Vehicles with Level 2+ automation typically include US$1,500–2,000 in component costs, while Level 3 and Level 4 systems cost even more.
Moreover, consumer demand for smart driving features is rising. More commercial models are adopting them. So, the market for autonomous technology is on track to be one of the auto industry’s biggest growth areas.
China could lead this growth. The country’s large cities, dense traffic, and strong government support for AI testing make it an ideal environment for scaling driverless fleets. Industry data shows that more than 20 Chinese cities now allow robotaxi testing or limited paid rides.
By 2030, China’s robotaxi sector could handle hundreds of millions of rides per year, potentially replacing a portion of traditional ride-hailing services. Consultancy forecasts suggest that robotaxis could account for 5% to 10% of all urban rides in major Chinese cities by the end of the decade.
Global automakers and tech companies are also watching closely. Toyota, Volkswagen, and Hyundai have all invested in autonomous-driving startups.
The rise of AI and electric vehicles is driving convergence between the auto and tech industries. This makes driverless transport one of the next big technology frontiers.
The chart below indicates that early growth will be slow as companies complete testing, secure permits, and scale their fleets. Once safety records improve and regulations ease, adoption will speed up, driven by cost savings, AI advancements, and public acceptance. After this rapid expansion, growth is likely to level off as the market matures and competition increases.
The Roadblocks Ahead
Amid rapid progress, driverless mobility still faces big challenges. The technology is expensive, requiring advanced sensors, lidar systems, and high-precision maps. Safety remains a concern, with each incident drawing public scrutiny and slowing adoption.
Regulation also varies by region. Some Chinese cities allow fully autonomous operation, while others limit it to specific zones or hours. International expansion adds more complexity, as each country has its own testing rules and data-sharing policies.
Another major hurdle is profitability. Many experts say it could take until the late 2020s before most robotaxi operators achieve positive margins. Until then, they will need continued investment to cover R&D and fleet expansion.
Industry Outlook: Why Investors Are Watching Closely
For investors, Pony.ai and WeRide’s IPOs offer an early opportunity to enter the driverless-car market through publicly traded shares. The listings also set a benchmark for valuing future AV firms.
For the industry, these IPOs symbolize maturity. They show that China’s autonomous-driving sector is confident enough to open its books and attract global investors. Success could encourage more companies — in lidar, battery tech, or mobility software — to follow suit.
Investors will closely watch how quickly Pony.ai and WeRide can scale their fleets, control losses, and turn pilot projects into profitable transport networks.
Pony.ai and WeRide’s Hong Kong IPO filings signal a new phase for China’s driverless vehicle industry. The twin listings bring visibility and funding to two of the world’s most advanced AV developers.
They also highlight China’s ambition to lead in autonomous mobility — a field that blends artificial intelligence, clean energy, and smart transport. While profitability may still be years away, this progress shows that the race toward self-driving transportation is no longer science fiction. It is an industry preparing to enter the next stage of real-world growth.
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Carbon permits in the European Union have recently climbed to their highest levels since August 2023. The rise reflects tighter supply, policy decisions, and shifting market demand under the EU Emissions Trading System (ETS).
The ETS is the world’s largest cap-and-trade system for greenhouse gas emissions. It mandates large emitters to buy allowances for the carbon dioxide they emit. These allowances are known as EU Allowances (EUAs).
EUAs are now trading at a price over €92 per tonne — the strongest level in about 18 months. This rise shows that companies and markets expect fewer allowances to be available in the future as the EU tightens its emissions cap.
What Is the EU Emissions Trading System?
The EU ETS began in 2005 as a tool to reduce greenhouse gas emissions through market forces. It sets a cap on total emissions from major sectors such as power generation, manufacturing, and aviation. Companies must hold enough allowances to cover their emissions each year.
The cap reduces over time, meaning fewer EUAs are issued. This creates scarcity. As allowances become scarcer, their price tends to rise, which increases costs for polluters. In theory, this pushes companies to reduce emissions or invest in cleaner technology.
In 2026, the system also overlaps with the Carbon Border Adjustment Mechanism (CBAM), a tax on imported carbon-intensive goods. CBAM began to apply in January 2026 and makes carbon costs visible on imports like steel and cement. The measure aims to cut down on “carbon leakage.” This happens when industries move production to areas with cheaper carbon prices.
Recent Price Moves: Highest Since August 2023
In early January 2026, EU carbon permits climbed as high as about €91.82 per tonne on EU markets, up from lower levels earlier in 2025. Now, it’s trading at over €92 per tonne, showing 27% increase from January 2025 prices. The rise represents a fourth consecutive weekly gain in allowances for the December 2026 contract.
The price rise reflects tightening supply — fewer allowances are available through auctions and free allocations. Reduced supply increases competition among companies that must surrender EUAs to match their emissions. This dynamic pushes the price higher.
Market analysts also note that colder weather and more heating needs in winter often boost industrial energy demand. This can lead to higher carbon prices during the season.
Why Prices Have Risen?
The recent uptick in EU carbon prices is driven by several key factors:
- Reduced Supply of Allowances:
The EU continues to tighten its emissions cap and reduce the number of new allowances issued. Estimates from the European Exchange auction calendar and Market Stability Reserve show that auction volumes will drop. They are expected to fall from about 588.7 million EU Allowances in 2025 to around 482.4 million in 2026. A stronger cap reduces the total pool of tradable EUAs, creating scarcity and upward pressure on prices.
- Policy Signals and Reform Expectations:
Investors and companies anticipate future regulatory tightening. The EU’s long-term climate goals include cutting net emissions by 90% by 2040 compared with 1990 levels. Such policy signals can strengthen confidence that carbon costs will rise further.
- Market Confidence and Funds:
Investment funds have increased their holdings of EU carbon futures. Trading positions and speculation can also influence price momentum, especially as market sentiment shifts toward tighter futures.
- Compliance Demand:
Industries covered by the ETS are required to surrender allowances to match their emissions by compliance deadlines. As deadlines near, buying activity can increase, adding short-term upward pressure on prices.
- Carbon Border Adjustment Mechanism:
With CBAM now active, imported products from outside the EU face carbon costs similar to domestic industries. This mechanism can reduce free allowance allocations and tighten supply further.
Looking Back and Ahead: Carbon Price Trends and Forecasts
Carbon prices in the EU ETS have fluctuated over recent years. Prices surged above €100 per tonne in early 2023. Then, they eased back in 2024 and 2025. This decline was due to shifting market conditions and wider economic factors.
In 2024, the average price of EU ETS carbon permits was around €65 per tonne, down from €84 per tonne the year before. High prices in 2023 reflected strong policy signals from the Fit for 55 climate package and global energy disruptions.
Looking ahead, analysts and forecast models expect prices to continue rising over the coming decade:
- A survey of market participants predicts that the average EU ETS carbon price will rise to almost €100 per tonne from 2026 to 2030. This increase will happen as demand exceeds supply.
- Energy market analysts predict that the average price could hit about €126 per tonne by 2030. This rise is due to stricter caps and wider emission coverage.
- Under the EU ETS II framework, starting in 2027, more sectors will be included, like buildings and transport. In some scenarios, prices might average €99 per tonne from 2027 to 2030.
- BNEF’s EU ETS II Market Outlook projects carbon prices reaching €149 per metric ton ($156/t) by 2030, driving substantial emissions reductions.
Overall, these forward estimates imply that allowance prices may continue to rise as the EU strengthens its emissions targets to meet climate goals.
Emissions Reductions Under the ETS
The EU ETS has contributed to measurable emissions reductions. In 2024, emissions under the system were roughly 50% lower than in 2005. This progress is set to help the EU meet its 2030 goal of a 62% reduction from 2005 levels. The decline was driven mainly by cuts in the power sector, with increased renewable energy and a shift away from coal and gas.
Renewable energy growth, including wind and solar, played a role. Increases in renewables helped lower emissions by reducing reliance on fossil fuels.
The drop in emissions may lead to higher demand for allowances in the long run. With fewer emissions, companies will need more allowances to meet the cap.
What Higher Carbon Prices Mean for Industry
Higher carbon prices affect the European economy in many ways. For polluting industries, rising carbon costs increase operating expenses. Companies may invest more in cleaner technologies to reduce their allowance needs. This can accelerate decarbonization technology adoption.
Policy makers face the challenge of balancing climate goals with economic competitiveness. Some EU governments, like France, want price limits in the ETS. This could stop big swings in carbon costs. It would also help industries plan better.
The Market Stability Reserve (MSR), a mechanism to absorb excess allowances, also plays a role. It intends to reduce surplus permits and stabilize prices. Combined with the tightening cap, the MSR tends to push prices higher over time.
The ETS’s expansion to include more sectors — such as maritime transport and potentially buildings and road transport under EU ETS II — expands the share of emissions subject to carbon pricing. This broadening can further tighten supply and push prices up.
Why EU Carbon Prices Matter Beyond Europe
The EU ETS remains the largest carbon market in the world. According to global carbon pricing data, carbon pricing instruments currently cover about 28% of global greenhouse gas emissions, up from about 24% previously. The EU’s system is a key driver of this trend.
Many national and regional carbon markets have prices much lower than the EU’s. This shows differences in climate policies and economic situations. The ETS’s tightening emissions cap, reduced auction volumes, and shifting market sentiment all play roles in supporting higher carbon prices.
Forecasts suggest that prices may continue upward in the years to come, potentially averaging over €100 per tonne by the end of the decade. Meanwhile, the ETS continues to help reduce emissions in key sectors and supports the EU’s broader climate targets.
These price trends and policy developments make the EU carbon market a central piece of Europe’s climate strategy and an important bellwether for global carbon pricing efforts.
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Carbon Footprint
BMW Outpaces Mercedes 2.5x in EV Sales, Proving Electrification Is the Emissions Lever
BMW widened its lead over Mercedes-Benz in the global electric vehicle market in 2025, selling more than 2.5 times as many fully electric cars as its longtime German rival. The growing gap highlights not only BMW’s strong execution but also the mounting pressure on Mercedes-Benz to reset its EV strategy amid weak demand and regional headwinds.
While both automakers faced a challenging macro environment, their electric vehicle performance moved in sharply different directions. BMW accelerated, especially in Europe. Mercedes, by contrast, lost momentum in key markets such as China and North America, forcing difficult product and portfolio decisions.
BMW’s EV Strategy Delivers Scale and Stability
BMW ended 2025 with 442,072 fully electric vehicle deliveries, including more than 105,000 electric Minis, marking a 3.6% increase from the previous year. Over the same period, Mercedes delivered 168,800 battery-electric vehicles, a 9% year-on-year decline. The contrast underscored BMW’s growing dominance in the premium EV segment.
More broadly, the BMW Group delivered 2.46 million vehicles across all powertrains in 2025, slightly higher than the previous year.
- Electrified vehicles—including plug-in hybrids—reached 642,087 units, up 8.3%, and accounted for 26% of total group sales. This balance between combustion engines, hybrids, and EVs continued to shield BMW from abrupt demand swings.
BMW executives described electrified models as the company’s strongest growth driver. Demand proved especially resilient in Europe, where supportive regulations, charging infrastructure, and consumer incentives remained relatively stable compared to other regions.
Jochen Goller, member of the Board of Management of BMW AG, responsible for Customer, Brands, Sales, said,
“In 2025, in a challenging environment, the BMW Group sold more vehicles than in the previous year. Our electrified vehicles were in particularly high demand. Europe reported especially strong growth, with battery-electric vehicles accounting for about a quarter of total sales, and BEVs and PHEVs combined reaching a share of over 40% across the region. We remain fully on track to meet our EU CO₂ fleet target for 2025.
Europe Anchors BMW’s Electric Momentum
Europe emerged as the backbone of BMW’s electric success in 2025. Fully electric deliveries surged 28.2% across the region, with battery-electric vehicles representing roughly one-quarter of BMW’s total European sales. When plug-in hybrids are included, electrified vehicles exceeded 40% of sales in several major markets.
This performance also helped BMW stay on track to meet its EU fleet CO₂ targets, a growing priority as emissions rules tighten further later this decade. The company’s ability to scale EV sales without sacrificing profitability reinforced confidence in its multi-powertrain strategy.
Meanwhile, BMW’s British subsidiary Mini reached a notable milestone. The brand delivered its 100,000th fully electric Mini, and more than one in three Minis sold in 2025 featured a battery-electric drivetrain. This success demonstrated that smaller, urban-focused EVs continue to resonate strongly with European buyers.
Warning Signs Emerge in the U.S. Market
Despite strong annual results, BMW’s fourth-quarter performance revealed emerging challenges. Global EV deliveries fell 10.5% year over year in the final quarter, reflecting broader softness in consumer demand.
The United States stood out as a weak spot. BMW’s BEV sales in the U.S. plunged 45.5% in Q4, falling to just 7,557 vehicles. For the full year, U.S. electric deliveries dropped 16.7%, underscoring the impact of high interest rates, uneven incentives, and lingering infrastructure concerns.
Even so, BMW’s diversified geographic exposure helped offset U.S. weakness. Strong European demand and early interest in upcoming models provided confidence heading into 2026.
Neue Klasse Signals BMW’s Next Growth Phase
BMW’s outlook received an additional boost from early demand for its upcoming Neue Klasse platform. The first modern model under this architecture, the electric iX3, generated strong initial orders across Europe.
In fact, customer reservations already cover nearly all of BMW’s planned European production for the model in 2026. The Neue Klasse platform is central to BMW’s long-term strategy, combining new battery technology, improved efficiency, and a software-first vehicle architecture.
By 2027, BMW expects to launch or update more than 40 models across various drive options, reinforcing its belief that flexibility—not a single-technology bet—offers the safest path through an uncertain transition.
In this context, Goller further noted,
“Especially in Europe, 2026 will be marked by the NEUE KLASSE. At the same time, we will be introducing several new models this year, such as the BMW X5, BMW 3 Series, and BMW 7 Series. In total, the BMW Group will launch more than 40 new and revised vehicles with various drive options by 2027.”
Mercedes Faces Structural EV Headwinds
Mercedes-Benz entered 2025 under pressure, and conditions worsened as the year progressed. Global car sales fell 8% in the first nine months, with particularly sharp declines in China (-27%) and North America (-17%). Trade tensions and tariffs further complicated the picture.
The car maker delivered 168,800 BEVs, down 9%. Mercedes achieved higher total electrified sales, including plug-in hybrids (PHEVs), at 368,600 units, flat year-over-year.
In the United States, Mercedes paused orders for its EQS and EQE sedans and SUVs mid-year, citing unfavorable market conditions. As per reports, customer feedback highlighted design concerns and price sensitivity, particularly as competitors introduced newer platforms and faster charging capabilities.
As a result, Mercedes decided to phase out the EQE sedan and SUV by 2026, only four years after launch. The move marked a rare admission that parts of its first-generation EV strategy failed to connect with buyers.
Mercedes Bets on a Reset, Not a Retreat
Rather than scaling back electrification, Mercedes is attempting a reset. The company plans an aggressive product offensive, with 18 new or refreshed models in 2026 alone and 25 new models globally over three years.
However, Merc’s electric CLA boosted demand. It’s a new 800-volt EV architecture, starting with the upcoming electric CLA and GLC. Mercedes claims the new CLA can add up to 325 kilometers of range in just 10 minutes, with charging speeds reaching 320 kW. The company hopes these improvements will directly address earlier criticisms around charging and efficiency.
CEO Ola Källenius has described the coming period as the most intense launch cycle in Mercedes’ history. Still, execution risks remain high, particularly as competition intensifies and EV demand growth moderates in some markets.
Sustainability Becomes a Competitive Divider
Beyond sales volumes, sustainability strategies increasingly shape long-term competitiveness. BMW continues to position electrification as the biggest lever for emissions reductions while maintaining optionality across technologies, including hydrogen and efficient combustion engines.
The company aims to cut CO₂e emissions across its value chain by 90% by 2050, using 2019 as a baseline. Interim targets include a 40 million-ton reduction by 2030 and a 60 million-ton reductionby 2035. BMW has already mandated renewable energy use across its battery supply chain and sourcing contracts, including Tier-n suppliers.
Mercedes, meanwhile, is pursuing its “Ambition 2039” plan, targeting a net carbon-neutral new vehicle fleet across the full lifecycle. The company plans to reduce CO₂ emissions per passenger car by up to 50% within the next decade, while increasing renewable energy use in production to 100% by 2039.
Both automakers recognize that as EV adoption rises, emissions reductions must increasingly come from manufacturing and supply chains, not just vehicle usage.
The Gap Widens, but the Race Continues
By the end of 2025, BMW had clearly established itself as the premium EV leader among Germany’s luxury brands. Its combination of steady electrification, regional balance, and early success with next-generation platforms set it apart.
Mercedes, however, is not conceding the race. Its upcoming models and platform overhaul could still narrow the gap, especially if global EV demand rebounds. For now, though, BMW’s lead remains firmly intact—and the pressure on Stuttgart continues to build.
- READ MORE: Global EV Trends: Growth, Challenges, and the Future of Electric Mobility • Carbon Credits
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