Ladies and gentlemen, thank you for standing by and welcome to Pony AI Inc.'s second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded and a webcast replay will be available on the company's investor relations website at ir.pony.ai. I will now turn the call over to your host, George Shao, Head of Capital Markets and Investor Relations at Pony.ai. Please go ahead, George.

Thank you, operator. And hello, everyone. We appreciate you joining us today for Pony.ai's second quarter 2026 earnings call. Earlier today, we issued a press release with our financial and operating metrics, which is available on our IR website. and Erlin's presentation, which we will refer to during the conference call, can also be accessed and downloaded on our Investor Relations website. Joining me on today's call are Dr. James Peng, Chairman of the Board and Chief Executive Officer, Dr. Tiancheng Lou, Chief Technology Officer, and Dr. Liu Wang, Chief Financial Officer of the company. They will provide prepared remarks followed by a Q&A session. Before we begin, please refer to the safe harbor statement in our earnings release, which applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under GAAP in our earnings release, available on our IR website and filings with the SEC and the Hong Kong Stock Exchange. I will now hand it over to our Chairman and CEO, and Dr. James Peng. Please go ahead.

Thank you, George. Hello, everyone. Thank you for joining our innings call today. We delivered another fantastic quarter highlighted by multifold expansion across the board. First, strong top line growth. Total revenue surged by 69% year over year. driven by a close to eight times jump in robo taxi revenue and over nine times surge in fare charging revenue. Second, rapid fleet scaling. Our robo taxi fleet expanded to 2,000 vehicles putting us on track to deliver 3,500 vehicles by year end. Third, expanded deployment. Domestically, we reinforced our leadership in tier one cities as we surpassed 1.5 million registered users. We also improved our network density with more deployed vehicles and operational coverage. Internationally, we unlocked demands by scaling our joint deployment model. Currently, We have secured over 4,000 vehicle commitments with Uber and other overseas partners. The expanded deployment in both China and overseas markets clearly shows that our dual-engine strategy is turning into robust top-line growth. Looking at our domestic operations first, The L4 industry in China is entering a new phase where higher standards are required to keep the industry on a sustainable, healthy trajectory. For any robot taxi company to enter into large-scale deployment, it now needs proven driverless capabilities, positive user satisfaction, and verified safety records. We are perfectly positioned to capitalize on this shift because we have already been operating well ahead of this curve. These rising standards will only widen our competitive moat and solidify our leadership in China. Our confidence actually is grounded in solid results from commercial Robotaxi operations. We have three Gen7 Robotaxi vehicle models in our daily services, including the GAC IonV, the BAIC ArcFox, Alpha T5, and the Toyota BZ4X. We are continuously improving user experience, which is the key driver for our organic user growth as our total registered users has surpassed 1.5 million. In Guangzhou, we extended our robo-taxi services into the city center, now adding over 300 square kilometers since the beginning of this year. The operational area spans across Haizhu, Tianhe, Huangpu, and Panyu districts, covering a population of over 7 million. As a result, our driverless fleet is positioned to capture highly concentrated and others. Shenzhen, known as China's Silicon Valley, serves also as a great showcase of our capability to navigate highly complex traffic scenarios. Our operational resilience was rigorously validated by corner cases such as the high demand holidays such as the Dragon Boat Festival, the peak rush hours and heavy rainstorms. Despite these demanding conditions, we effectively met high-frequency commuting demands. In addition, by seamlessly integrating three major transit hubs, including Bao'an International Airport, Shenzhen Bay Port and the Circle Cruise Port. We further expanded our network to provide users with greater convenience and more mobility options. Now turning into our global expansion. To meet the ever increasing demand of L4 mobility in overseas markets, we have entered more international markets with huge consumer demand and the commercial potential. We are using our joint to form global alliance, fulfilling autonomous mobility demands in these international markets and creating values for our partners. To that end, we collaborated with multiple partners to accelerate our international pipeline. Currently, we have secured over 4,000 vehicle commitments led by over 2,000 robotaxis across five European cities with Uber, alongside commitments from some other partners. Meanwhile, we continue to deepen our operations in existing markets. In Luxembourg, our deployment with Bolt and Stellantis keeps moving forward. And in Singapore, our service is now officially live for the general public. on Comfort Dialogues ride-hailing app called Zig. These international demands are a direct endorsement of our Gen 7 mobile taxi operations in China's Tier 1 cities, where we have proven our superior driving capability, reliable 24-7 operations, high user satisfaction, and positive UE. I'm confident that this proven model will continue to win partners with more vehicle deployment commitments and drive user adoption globally. Now let me elaborate a bit more on our joint deployment model. As we expand our fleet across China and overseas, we leverage existing local ecosystems and our partners on the ground expertise to drive capital efficient expansion. I am very pleased to share that the model is already delivering strong tangible commercial results. First look at a strong moment, the monetization was validated in Q2. By broadening our partnerships, we delivered significant quarter-over-quarter growth in revenue contribution. That's a direct proof point of this DDM model's financial viability. Second, the joint deployment model is the asset-light one where our partners fund the fleet. This fundamentally enables faster scaling, lower unit costs, and the superior capital efficiency for our fleet expansion. Third, with fast scaling, JDM essentially unlocks massive commercial value for years to come. For example, we recently expanded our partnership with Uber to market at premium markets. This creates a highly repeatable growth engine, allowing us to attract more partners and deliver even higher growth trajectory. Now let's move to our robot truck business. Our robot truck business delivered outstanding results in Q2, with revenue jumping more than 40% year over year. We actually expect this growth momentum to persist and even strengthen in the second half of this year. We continue to expand our long-haul operations with Sinochance through our joint venture. At the same time, our Gen 4 robot trucks have entered mass production and already begun commercial operations. Working with China Merchants Port, we launched our commercial deployment of robot trucks at Shenzhen's Marwan Port, where our fully driverless robot trucks operate together with other human-driven trucks. This success highlights our unique cross-segment synergies. We have leveraged our rich operational experience from urban robotaxis and long-haul robotrucks to enable our trucks to seamlessly navigate traffic interactions at the ports. As we pass the midpoint of the year, Our acceleration across both domestic and international markets puts us well on track to surpass our 20-city goal by year-end. In China's Tier 1 cities, we will continue to deploy more vehicles to our fleet to widen our competitive moat and advance our scaling edge. and at the same time, we are on track to enter multiple domestic new markets. Internationally, the point deployment model will contribute top line growth with great capital efficiency. This new momentum gives us greater confidence in beating our original robo taxi revenue outlook, which is exceeding 3.5 times last year's level. Looking ahead, our focus remains clear, delivering long-term value creation and driving the commercialization of autonomous driving with capital efficiency. Now I'll hand it over to our CTO, Tiancheng, to go over the technology progress.

Tiancheng, please go ahead.

Thank you, James. Hello, everyone. This is Tiancheng. To start, our strong Q2 momentum is driven by our unique tech stack. This foundation allows us to scale rapidly and adopt similar stack costs both domestic and international markets. Starting with our domestic market, this is where we validate our technology in most challenging scenarios and translate this mastery into commercial value. Tier 1 cities such as Guangzhou and Shenzhen are clear examples. In older urban cores and major transit hubs, roads are narrow, residential neighborhoods are dense, and roadside parking are common. Our world model and virtual drivers proved to be more agile and precise in navigating these extreme conditions, ultimately delivering higher commercial returns than regular scenarios. We also rapidly replicate this success to more high-premium urban markets globally. Traffic rules and driving habits vary significantly across China, Europe, the Middle East, and Asia. Despite these fundamental regional differences, our robust generalization enables rapid deployment. Our proven technical track record, especially in Tier 1 cities of China and Zagreb of Croatia, is exactly why top-tier partners are choosing to scale with us through our joint development model. Beyond the driving capability, another key engine behind our extension is efficiency. Let me now elaborate on how our unique technical and operational capabilities deliver these efficient benefits. As I shared in previous quarters, The key to enabling over-road taxi to seamlessly navigate diverse urban environments lies in over-world model precision. This is what bridges the gap of so-called seem-to-real in physical areas. In autos driving, closing the gap comes down to modeling the probability distribution of different behaviors among traffic participants. For example, the probability of a pedestrian standing on the roadside suddenly jaywalking varies from city to city. A high-precision world model accurately captures these dynamics, enabling the virtual driver to handle such scenarios with confidence. Our current upgraded Pony World 2.0 brings this precision alignment into loop engineering. The system automatically isolates deeply hidden issues, generates targeted solutions, and validate them for real-world deployment, reducing the need for human engineers to analyze cases one by one. This also dramatically accelerates our development timeline. The old way of entering a new city takes thousands of engineers doing manual work to review local driving issues. Analysis the root cause of these issues, upgrade the world model, and retrain the onboard models, and then deploy and validate the new model on the road. However, with Pony World 2.0, our system leverages AI to resolve these local changes automatically. This turns cities' attention from effort that used to take a dozen of engineers into a human-in-a-loop automatic process that just a few people can run. So for example, when we went to Zagreb, we noticed local drivers almost never slowed down when they called right away, even near a black spot. Pony World 2.0 caused this difference automatically and we quickly trained a new version of virtual driver that fits local habits perfectly with very few engineers involved. As a result, we can now launch in multiple cities with completely distinct driving environment all at once. This scalability ensures we efficiently achieve our target of 20 cities by the end of this year. This gives us the unique efficiency advantage to scale our footprint far more rapidly. On the operational side, we are also using technology to redefine efficiency. For example, we don't need a closed, dedicated parking lot to charge our cars. Our robot taxis can share a normal parking lot with human drivers driving themselves to find an open charging spot without human intervention. This means a tiny Guang team can easily manage charging and service for a large fleet. This optimizes personnel allocation and lowers our UAE cost. The vehicle-to-staff ratio for our Guang supporters and remote assistance team has improved significantly. More importantly, It also boosts the willingness of industry partners to adopt our joint development model. So as James mentioned, multiple partners such as Uber are clear examples. In short, our tech-driven efficiency gives us a unique operational leverage as we scale across new markets. This not only reinforces our competitive mode, but also positions our technical innovation as a core engine driving the entire industry forward. This concludes my prepared remarks. I will now pass the call over to our CFO, Dr. Leo Wang, for a closer look at our financial results. Leo, please go ahead.

Thank you, Tiancheng. Hello, everyone. This is Leo. I will focus on year-over-year comparisons for the second quarter and the first half of 2026, unless otherwise noted. For detailed financials, please refer to our earnings release. This quarter, total revenues reached 36.2 million U.S. dollars, representing a remarkable 69% increase from 21.5 million U.S. dollars in the same quarter last year. Breaking down this strong top-line growth by business segment, most notably, our robo-taxi revenue are growing 691% and the robo-truck revenues growing 40%. Our phenomenal triple-digit Robotaxi growth is a strong demonstration that our commercialization strategy is translating into good financial numbers. Look deeper into Robotaxi. We delivered a very strong growth this quarter. Robotaxi revenues reached a record high of 12.1 million US dollars, growing 691% A further acceleration from the 395% growth compared to the first quarter. Our fair charging revenue delivered an exceptional growth rate of 849%. These rapid growth rates show that Robotaxi continues to serve as our core growth engine. This acceleration was driven by several factors. First, Our fare charging fleet continued to expand across more regions, and specifically into core downtown areas with high economic values. Second, our joint deployment model gained significant momentum, and our commercial robot taxi launched in Zagreb, Croatia, has served as a powerful showcase. As the first of its kind in the city center of a European capital, Zagreb has proved proved our high quality service in a demanding international market and enabled us to secure additional overseas contracts. Under the joint deployment model, we are currently recognizing upfront vehicle delivery revenues, which establish a solid foundation for us to having high margin recurring revenue sharing income going forward as our fleet operations scale. What is Particularly encouraging is that this acceleration is broader-based, not concentrated in a single market. In China, in this quarter, we continue to strengthen our leading position in Tier 1 cities with fast-growing scale and a strong user base. Overseas, we are building an alliance that accelerates our global footprint. For example, we have secured over 4,000 initial vehicle deployment commitments with Uber and other overseas partners. Our continuous expansion in China and overseas were translating into a rapidly increasing base of recurring robo-taxi revenues. Turning into robo-truck, the revenue grew 40% year-over-year to $13.3 million this quarter. This growth was driven by increased logistic transportation revenues RoboTruck growth is more than just about volume. It reflects the cross-segment signatures within our ecosystem from RoboTaxi to RoboTruck. As James highlighted, the Marwan port demonstrates our ability to apply the technology and operational capabilities polished in RoboTaxi urban environments and RoboTruck long-haul routes to a new vertical. Our Intelligent Solutions segment delivered a revenue of $10.8 million this quarter, a 4% year-over-year increase, with the growth rate moderating due to the delivery fluctuation from domain controllers. For the first half of 2026, the Intelligent Solutions revenue reached approximately $26.3 million, The same quarter last year. Total gap operating expenses were $72.1 million this quarter, and the non-gap operating expenses were $63 million, representing a modest 9.6% increase. The expense increase is significantly lower than our revenue growth rate of 68.8%. As Tiancheng mentioned, our leading Pony World Model 2.0, an AI-powered closed-loop R&D framework, allows the same engineering team to handle far more work across different cities and a complex corner case analysis. The R&D efficiency is directly visible in our financial numbers. We are scaling and others. We continue to see our operating loss margin narrowing and operating leverage beginning to materialize as revenues scale. The loss from operation was $65.7 million, a modest 7.3% increase The operating margin narrowed dramatically from negative 285.6% in Q2 2025 to negative 181.5% this quarter, an improvement of over 100 percentage points. On a non-GAAP basis, loss from operation was $56.7 million, increased by less than 5% year over year. Net loss narrowed significantly to $45.4 million, a 14.9% year-over-year decrease compared to Q2 2025. The net loss margin narrowed from negative 248.3% to negative 125.2%, an improvement of more than 100 percentage points. From a broader perspective, our revenue growth rate significantly outpaced our non-GAAP operating expense growth rate, clearly demonstrating economics of scale and operating leverage. Turning to our balance sheet, cash and cash equivalents, short-term investments, restricted cash, and long-term wealth management instruments stood at $1.39 billion. As of June We continue to maintain a prudent cadence in cash management and maintain a robust financial position. Net cash used in operating activities was 44 million US dollars this quarter, compared to 25.4 million US dollars in the second quarter of 2025. The increase was due to normal working capital fluctuation, especially the settlement of accounts payable during the current quarter, coupled with strategic investment in inventory. and proposed to support our fleet expansion in the second half this year. Capital expenditures were 32.2 million US dollars this quarter, bringing first half CapEx to 44.3 million US dollars. This was mainly driven by the fleet and the Automotive Driving Kit CapEx as we see Robotaxi acceleration in both domestic and overseas markets. as well as increasing spending in data centers to support our greater scale deployment and continuous R&D. As we scale up our fleet, we expect to maintain capital discipline supported by our partners' co-investment under the joint deployment model framework. Our capital allocation strategy is designed to balance disciplined investment with scalable growth. Specifically, We invest in our core technology and own the fleet in key domestic markets while partners contribute the fleet capital and the local operating capability through the joint deployment model. This allows us to expand our revenue generating footprint across China and international markets without a proportional increase in capital intensity. Together with approximately 2,000 vehicles produced operating footprint across the world, more than 1.5 million registered domestic users and 1.39 billion US dollar cash reserve. We have the operating momentum, global opportunities and financial resources to execute our full year's target and support sustainable growth beyond the 2026. Meanwhile, with our recent inclusion in Hong Kong listing Stock Connect, we are excited to welcome onshore investors and maintain committed to transparent market engagement and long-term shareholder value creation. I will now turn the call over to the operator to begin our Q&A session. Thank you.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. If you ask questions in Chinese, please repeat them in English. At this time, we will pause momentarily to assemble our roster. The first question today comes from Ming-Shang Li with Bank of America. Please go ahead.

Hi, James and Tiancheng and Leo, congrats for the good results. So I only have one question. So given that Uber partners with several autonomous driving companies worldwide, what are the main reasons that made Uber choose Pony in its European rollout? Thank you.

Thanks, Mingxuan. This is James, and I'll take this one. As you can see, I'm actually quite pleased that we have signed a commercial agreement with Uber to deepen our collaboration. I think the reasons Uber decided to work closely with us are actually quite straightforward. Uber always looks for autonomous driving partners whose technology is reliable at scale. and also whose cost structure brings the attractive economics. That's exactly the two reasons that we can offer on the table. We actually worked with Uber back in early 2025. At that time, our Gen 7 Robotaxis just started the deployment in China. And at that time, there were some doubts whether our autonomous driving capabilities can handle the European cities, especially the big ones where the infrastructure and the road condition are typically mixed with old and new. But after a year, now look at, I think the question has been answered with resounding real-world evidence. We have already launched large-scale robot taxi commercial operations in all tiered cities in China. The unit economics turned positive in Guangzhou and Shenzhen. In addition, we also rolled out Europe's first commercial robo taxi service in Zagreb, Croatia with Uber and Vern. So all this evidence shows that our robo taxis can cover the most complex, highest demanding scenarios. and also what we have found out is the more places a vehicle can operate, the higher utilization becomes. So on the cost side, we also can offer is even more compiling, right? Combining with the hardware and also the operational costs. Our total cost per mile is the most competitive in the industry. I think another important reason is that the cultural alignment has also been a hallmark of our collaboration between Pony and Uber. Both sides are impressed by one another's professionalism and dedication. The mutual appreciation and the mutual commitment really lead to right now what we have seen, the expanded collaboration. Both of our companies The strategy is to begin with the most socially and economically meaningful markets, and then we'll even extend our mobility services to additional geographies. So what we announced about the 2,000 vehicles is under the current contract. With this contract, we become Uber's largest autonomous driving partner in Europe. Going forward, as the performance and also the economics continue to validate at scale, we'll see substantial room to expand the fleet size even further. So back to the operator.

The next question comes from Tim Shao with Morgan Stanley. Please go ahead.

Thank you, management, and congratulations on the strong quarterly results. Could you please elaborate on your strategy going forward for the joint deployment model? And also, can you share more color on how the commercialization model works and operate under asset-light model?

Thanks for the question. This is James again. Probably let me begin with a high level, and I'll probably, regarding the details, I'll hand over to Leo. So the joint deployment model will actually accelerate our fleet expansion with high capital efficiency, both domestically and internationally. You can think of this as, in this model, we are building a win-win model across the value chain. The success of our Gen 7 robo taxi operations across the tier one cities It's really a showcase. It proves that our superior safety record and operational efficiency, and then ultimately 10 positive UE margins. By delivering this top tier driving capabilities and user experience, and at the same time, at very low hardware and operational costs, we can achieve high margins than our peers. Therefore, partners in our ecosystems, whether it's a mobility platform or a fleet operator, they can share the most economic value per deployed vehicle. So on the high line, we can think of the joint deploy model they gave partners. are naturally incentivized to commit a large portion of their fleet shares to Pony because in this model, they can maximize their total value generated together with us. Regarding the details of this business model, I'll now hand over to Leo.

Yeah, thanks, James, and this is Leo. Yes, Tim, you mentioned it's correct. This is an asset-light model for Pony to expand our fleet, and in most cases, There are three parties, and each plays a different role. For Pony, we supply our Gen 7 robot taxi with our virtual driver capability, that is an AI driver, a mobility platform that can introduce user demands, and an operating company who can deal with fleet management and maintenance. We, of course, acknowledge in different markets the consumer can have the choice on mobility platforms, and there are existing operating companies. So we don't want to disrupt these ecosystem in these markets. But instead, our joint deployment business model is trying to bring values and form a win-win alliance. For example, we leverage Uber and Bolt as mobility platforms to attract demands. And we are also partner with Vern in Croatia and Confidelgo in Singapore as local fleet operators. So from a financial perspective, this model could generate sharing-based revenue or technology licensing fee for Pony. And this is not only broaden our revenue base, but also introduce higher margin recurring income across the entire Robotaxi operating life cycle. As we expand our footprint into higher premium international markets, for example, in Europe, in the Middle East, and in other parts of Asia, we definitely think this could lift our long-term financial outlook. And just to be clear, these 4,000 vehicle commitments from Uber and other partners will serve as a multi-year growth catalyst for 2026 and beyond. I will now turn the call back to the operator.

The next question comes from Paul Gong with UBS. Please go ahead.

Thanks for taking my question. I have one question regarding the Pony World 2.0. I think Tiancheng has mentioned about its self-evolution and loop engineering. Can you please provide more color What makes cells evolution different in autonomous driving and how does it improve your R&D efficiency? And if we think in the future, if someone opens source a world model, would your modes be affected? Thank you.

Thank you. This is Tiancheng. I will take this one. To start, I will say autonomous driving is a physical AI. So training the on-board model or improving the world model are both built on real-world feedback. A general-purpose open-source world model is basically just a 3D video generator. It can generate data, but that's nowhere near enough to train an autonomous driving system. So we use world model to train the on-board model through reinforcement learning. To do this right, it is not just simulating what people do. It's about how often they do this. Take a pedestrian suddenly jaywalking as an example. The chance isn't 99%. It's not 1% either. So precision means matching the exact real world probability. That level of statistical accuracy is what we mean by precision of the world model. So the probability distribution of traffic participants varies from city to city to city. Although our model generalizes capabilities strong enough to handle extreme scenarios worldwide, we still need to fine-tune it for local driving styles. So for example, in both China and Croatia, there are drivers who change lanes without checking behind them. It happens with different probability in different places. So that's where Pony World 2.0 comes in. It is a self-evolving system that continues improving the world model precision. In the past, our workflow was human-led. So when we enter a new city, we collect data from that region that engineers will determine which scenario the current world model lacks precision. Now, AI drives the whole process. Humans are still involved, but mostly for verification and validation. So as a result, we significantly reduced engineering resources to enter a new city. In other words, without adding R&D resources, we can either enter many new markets at the same time, quickly achieving safe and smooth L4 autonomous driving. This ability to scale is a very large moat, and I do not think it will be affected by any open source generative world model. With this, back to the operator.

The next question comes from Jeff Chung with Citi. Please go ahead.

Hi, this is Jeff. Thank you for the opportunity. My question is about the domestic market and how should we think about Pony's new outlook for the domestic market heading into the second half of the year.

Thank you.

Thanks, Jeff. Hey, this is James. I'll take this call. As you can see that China is our home base. I believe that domestic fleet expansion remains a significant part of our vehicle rollout. China itself represents a massive mobility market with over 10 million taxis and ride-hailing vehicles. So it's a highly, but the reality is that also the mobility demands highly concentrated in tier one cities and tier two cities. So as a result, our strategy remains the same. We'll start our focus from the highest value of the markets and then expanding into other cities and regions. The tier one cities alone account for a significant share of the National Right-Heading Demand. These cities are also the ones that offer the most mature regulatory framework to support autonomous driving. Today, our scale and the commercial model in these tier one cities remains industry leading. In our larger operational hubs, such as Guangzhou and Shenzhen, we are already seeing strong growth momentum. Expanding the fleet and many more. This virtuous cycle not only drives paid order growth and margins, but also and others. At the same time, scaling allows us to amortize the operational costs, driving down our daily per vehicle costs. So what we have seen is really a continuous improvement of our UAE margins. Therefore, We will proceed with deploying more and more fleets in the tier one cities to widen our competitive moats. Meanwhile, of course, second tier and even third tier markets are strategically vital. This year, we plan to enter key cities such as Hangsha, Hangzhou, and many of the additional greater Bay Area cities and potentially some other cities and regions. This will establish the foundation for these markets, essentially become a new growth engine for us to go forward. With this, back to the operator.

The next question comes from Xiaoli with Jefferies. Please go ahead.

Thanks for taking my question. This is Xiaoli from Jefferies. My question is on Robotaxi operations. You've mentioned that operational efficiency is crucial for running the fleet at scale. Could you maybe give us more color on how is that actually being achieved? For example, on the remote assistance side, vehicle utilization or charging and maintenance perspective, and then how those efficiency gains are helping you accelerated deployment, both in terms of expanding existing cities and entering new ones. Thank you.

This is Tiancheng. Yes, thanks for the question. So regarding the operational efficiency, I will start saying based on our experience across the Tier 1 cities, so we now have developed a deep understanding of the complexity of operating the fully driveless fleet. This is a completely different game for managing traditional taxis. So at the end of the day, efficiency comes down to one thing, the fleet to staff ratio. So with traditional taxis, it's always one-to-one. 100 cars need 100 drivers to handle everything from cleaning, charging, to daily maintenance. So for us, it's not just about managing people better, but even critically on whether technology can minimize the need for human involvement. For example, when all robot taxis return to a depot, they require zero human assistance, autonomous navigating, locating available chargers, and executing self-parking, even in very tight space. So because of that, we need three people for every 100 robot taxis to keep daily operations running smoothly. That's true, whether we run them by ourselves or work with partners. So this is directly translated into significantly lower operating costs per vehicle and advanced unit economics. Therefore, without inflating management overhead and the cost, we can still expand into new cities and deploy more vehicles rapidly. We have developed this know-how into standardized operating procedures and automation tools. That's why more and more partners are joining us to adopt an over-drawn department model, making Pony Robotaxi the most efficient and profitable choice available. With this, back to the operator.

The next question comes from Kai Shao with CICC. Please go ahead.

Thank you, management, and congratulations for the quarter. Could you give us an update on your new business initiatives, specifically the progress with your L4 light truck business? Thank you.

Thanks, Kai. This is James, and I'll take this one. The new business initiatives, especially the L4 light truck, I think fits very well with our vision and ambition, which is autonomous mobility everywhere. The L4 light truck has a great synergy among our current product offerings. Think about it, it can leverage the Robotech's driving capabilities and the cost-efficient hardware. And at the same time, the light truck also shares the same customer base with our robot truck. The light truck almost shares 100% of our Robotaxis technology and operational infrastructure. So essentially, the development and operation can slash our costs. The light truck extends the logistic portfolio from long haul into urban delivery. It essentially unlocks a new time. In China alone, the active light truck fleet on the road exceeds 8 million vehicles. Also look at the current already on the ground, the low-speed robovan. Compared with that, our light truck offers three to four times the cargo capacity and also the speed is two times faster. As a result, it can open up heavier loaded commercial applications across the full urban supply chain. If you think about typical usage, those from distribution hubs to the shopping malls to the supermarkets and also the convenience stores. As you recall that we actually unveiled the L4 light truck in the Beijing Auto Show. Since then, it has been four months. And in that four months, we have already built a strong commercial ecosystem. The vehicle itself are jointly developed with CATL. The vehicle is the world's first automotive grade, fully redundant light truck, purposely built for L4 autonomous driving. Currently, we also have secured partnerships with SF Express and China Post Technology, two leading logistics operators in China. With the orders and the deployment schedules already in place, this partnership can create a strong pipeline for the autonomous urban delivery. Looking at the remaining of this year, I believe that the collaboration pipelines with even more OEMs and the fleet operators will still be in the pipeline to drive scaling up. We'll also integrate with urban logistics network platforms to capture even further demand. So I'm actually very excited about this new initiative. With this, back to the operator.

The next question comes from Anne Ni with Everbright Securities. Please go ahead.

Hi, Bureau of Management. Thank you so much for taking my question. We know that Waymo's management recently said that the demo is only 1% of the work. Could Pony's management share your views on this comment, please? Thank you.

Thank you. This is Tiancheng. I will take this one. First of all, this is an interesting framing, and I think it captures something real. So building an impressive demo and scaling are two entirely different games. Autonomous driving is really a probability problem. If you get into one accident every thousand kilometers, sure, you can do a demo, because a demo only covers a few kilometers. But at a scale, This accident rate is a deal breaker. A typical ride-sharing vehicle drives about 300 kilometers a day. So if you have a fleet of 100 cars in one city, so that is tens of thousands of kilometers every day, the fleet will see 10 accidents every single day. Then no regulators will tolerate this, and the public definitely won't. So because auto driving is a probability problem, Risk evolves differently at scale. Proving safety takes time and mileage, and you cannot just shortcut by dumping solemn cards on the street overnight. Precise and time are not interchangeable. This is also why regulators everywhere take the exact same approach. They go step by step. A small fleet first proves of safety at that scale, then to the next level. So technically, going from a demo to full scaling takes multiple 10x jumps in performance. And every jump is harder than the last. It's not just about fixing the remaining 10% of problems, but also systematically resolving 90% of the issues without creating new ones. For example, heartbreaking to avoid a collision may solve a problem. but it may create more rear-ended collisions. And if the underlying technical approach is wrong, safety has a hard ceiling. Therefore, proving safety to regulators is just the only one of the bar. From a technical standpoint, new players have to prove they can enter it very fast because the leaders are already miles ahead by several of the magnitude of safety. So long story short, if all you have today is a demo, you still need to prove that you can achieve multiple 10x performance jobs. And on top of that, you'll need time to build trust with regulators before you can scale. So for Pony, we've already checked both of these boxes. That's why our focus for today is on expanding into more cities and deploying larger fleets. So with that, back to the operator. Thank you.

As there are no further questions now, I'd like to turn the call back over to the host for closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to speaking with you in the next quarter.

This concludes today's conference call. You may now disconnect your line. Thank you.