China Resumes Issuing Robotaxi Permits, Boosting Baidu and Pony AI Stocks

On Thursday (23rd), foreign media reported that China has resumed issuing robotaxi testing permits after suspending them for several months, indicating that regulators have completed industry-wide safety reviews and are gradually allowing autonomous driving companies to resume expansion, reaffirming advanced technology as a policy priority.

Insiders revealed that several Chinese cities have recently begun gradually reinstating robotaxi permits. Regulators completed a comprehensive industry safety review by the end of June, which was triggered by over 100 robotaxis operated by Baidu (BIDU-US)(09988-HK) suddenly halting operations in Wuhan in March. Authorities then suspended new permit issuance in April and required the industry to conduct a full safety review.

Neither the Chinese government nor Baidu has publicly explained the cause of the Wuhan incident. Hundreds of Baidu robotaxis were forced to stop due to safety inspections, but since early July, videos and photos of Baidu's 'Luobo Kuai Pao' driverless vehicles back on the roads have surfaced on Chinese social media. Some vehicles still carry safety drivers, suggesting Wuhan operations may be gradually resuming.

Among the first companies to receive new permits is autonomous driving technology firm Momenta, which has been approved to begin testing in Shenzhen. Shenzhen has also revised its smart connected vehicle regulations, proposing to expand robotaxi operations citywide and lower barriers to entry for operators. Following the announcement of its permit approval, Momenta's stock rose this week.

The resumption of permit issuance is expected to help Chinese robotaxi operators overcome the suspension crisis and return to a growth trajectory. The news boosted related stocks: Baidu's Hong Kong-listed shares rose 2.3% on Thursday, closing at HK$106.80; Pony AI (02026-HK)(PONY-US) surged 5.4%; and WeRide (00800-HK)(WRD-US) gained 1.6%.

WeRide stated it welcomes a clear, stable, and predictable regulatory environment to support the responsible development of autonomous driving technology and will continue collaborating with regulators and industry partners. Beijing is also drafting high-level autonomous driving regulations to ensure vehicle and AI technology safety and quality.

In overseas markets, Baidu, Pony AI, and WeRide are competing with Waymo, a subsidiary of Alphabet (GOOGL-US), for global robotaxi dominance. Chinese firms benefit from mature electric vehicle supply chains, offering cost advantages and faster mass production. China's resumption of permit issuance reflects Beijing's intent to balance safety regulation with industrial development while vying with the U.S. for leadership in autonomous driving technology.