Pony AI Inc. ( PONY ) shares are trading higher Tuesday after the company said it will expand its autonomous robotaxi fleet into Dubai.

What To Know: The surge in shares comes after Pony AI announced that it signed a memorandum of understanding with the Dubai’s Roads and Transport Authority to deploy driverless taxis in the region.

The company said the rollout will happen in phases, with supervised trials set to launch later this year followed by a fully autonomous taxi launch in 2026. Pony AI also stated its intention to scale its global fleet to thousands of vehicles within the next two years. The move is part of Dubai's broader goal to convert 25% of its transportation network to autonomous systems by 2030.

“Dubai stands at the forefront of intelligent urban mobility innovation, and we are honored to collaborate with RTA on this transformative initiative. By combining our proven autonomous driving technology and extensive fleet operation experience, we are committed to accelerating Dubai’s transition to autonomous transportation,” said Leo Wang, CFO of Pony AI.

The Dubai agreement marks another step in Pony AI's ongoing global expansion. The company already has licenses in the U.S., South Korea, China and Luxembourg, and has more than 270 robotaxis in its fleet in China. Recent partnerships with Uber and Tencent further indicate Pony AI's push to advance autonomous vehicle technology.

The rally in Pony AI shares began in pre-market trading, where the stock was up over 6% before continuing higher in Tuesday’s regular session. The deal further positions Pony AI as a competitor to Tesla, which is planning a limited rollout of its robotaxi service in Austin next month.

The market's response shows increased confidence in Pony AI's execution strategy and its ability to form high-level partnerships to expand internationally in the competitive autonomous driving space.

PONY Price Action: Pony AI shares were up 16.9% at $20.36 at the time of publication Tuesday, according to Benzinga Pro.

Read Next:

Wall Street Rockets As Bond Yields Drop, Tesla Hits 3-Month Highs: What’s Driving Markets Tuesday?

Image via Shutterstock.