Pony AI Plunges 9.2%—Is the Robotaxi Revolution Losing Momentum?

Summary
• Pony AI (PONY) slumps to $13.33, a 9.2% drop from Friday’s close of $14.79
• Shanghai driverless permit announced July 26 sparks mixed market sentiment
• Technical sentiment signals 'Strong Buy,' yet price action defies bullish indicators
• Analysts remain split: Daiwa upgrades to 'Strong Buy,' while Spark AI rates 'Neutral'

Today’s volatile session for Pony AI underscores the tension between regulatory optimism and market skepticism. Despite securing a landmark permit for driverless robotaxi operations in Shanghai’s Pudong New Area—the only such authorization in China’s top-tier cities—the stock has cratered from its 52-week high of $23.88 to a 40-square-kilometer test zone launch. With a 3.6% turnover rate and $5.3B market cap, investors are grappling with the stock’s sharp divergence from its technical 'Strong Buy' signal. The broader EV sector, led by Tesla’s -1.92% intraday drop, adds to the unease.

Regulatory Optimism Clashes with Market Realism
Pony AI’s 9.2% plunge defies the significance of its Shanghai permit, which marks a pivotal step in commercializing driverless taxi services. The company’s strategic expansion into Pudong’s financial hub—home to multinational corporations and financial institutions—was hailed as a milestone. However, the market’s reaction suggests skepticism about scaling profitability. Analysts highlight PONY’s 'significant financial challenges and valuation concerns,' despite Daiwa America’s recent 'Strong Buy' upgrade. The stock’s collapse aligns with broader sector headwinds, including Tesla’s decline, and underscores investor anxiety over EV industry valuations amid slowing demand and production hurdles.

EV Sector Falters as Tesla Drags, Pony AI's Permit Hopes Dampened
The Automobiles sector, led by Tesla’s -1.92% intraday drop, reflects a broader malaise. Pony AI’s 9.2% decline mirrors the sector’s struggle with profit expectations and valuation pressures. While PONY’s Shanghai permit is a technical win, the market’s bearish shift mirrors Tesla’s earnings-driven sell-off and global EV production bottlenecks. The sector’s 52-week low of $4.11 for PONY and Tesla’s earnings guidance (-$0.38 EPS) highlight shared challenges in monetizing autonomous mobility innovations.

Options Volatility Rises: Puts Outperform as PONY Faces Crucial Support Test
• RSI: 67.97 (neutral), MACD: 0.32 (bullish), Bollinger Bands: Upper $15.10, Lower $11.57
• 50-day MA: $14.20 (above current price), 200-day MA: $12.44 (key support)

Pony AI’s price action suggests a critical test of its 200-day MA ($12.44) and Bollinger Band lower bound ($11.57). The stock’s 67.97 RSI and 0.32 MACD indicate overbought conditions, yet the -9.2% drop hints at a bearish reversal. For short-term positioning, consider:

• PONY20250808P14: Put option with 358% price change ratio, 89.89% IV, and 12.30% leverage. Delta: -0.55 (sensitive to downward moves), Gamma: 0.187 (high sensitivity to price swings), Theta: -0.003 (minimal time decay). Turnover: 12,089. This contract offers high leverage for a 5% downside scenario (target price $12.76), yielding a potential $1.24 payoff per share.
• PONY20250815P13.5: Put option with 135.48% price change ratio, 80.64% IV, and 18.53% leverage. Delta: -0.46, Gamma: 0.209, Theta: -0.012. Turnover: 2,554. This contract balances moderate leverage with high gamma, ideal for a 5% drop (target $12.76) and potential $1.74 payoff per share.

Aggressive bears may consider PONY20250808P14 if support at $13.33 breaks, while PONY20250815P13.5 suits those targeting a rebound above $14.50.

Backtest Pony AI Stock Performance
The backtest of PONY's performance after a -9% intraday plunge shows favorable results, with win rates and returns indicating positive short-to-medium-term gains. The 3-Day win rate is 48.35%, the 10-Day win rate is 49.45%, and the 30-Day win rate is 72.53%. The maximum return during the backtest period was 31.63%, with a maximum return day at 49.

PONY at Crossroads: Watch $13.33 Support as Earnings Loom
Pony AI’s sharp decline highlights the fragility of EV sector sentiment amid regulatory optimism. The stock’s ability to hold above $13.33—its intraday low—will determine near-term direction. With Q2 earnings due August 12, investors must weigh the Shanghai permit’s commercial potential against persistent valuation concerns. Tesla’s -1.92% drop serves as a cautionary benchmark. Position for a rebound if $13.33 holds, or pivot to puts if the breakdown confirms a bearish reversal. Watch for $13.33 breakdown or regulatory reaction.