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Pony AI prices IPO at top of target range

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Chinese self-driving startup to start trading in New York

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IPO values Toyota ( TM )-backed firm at $4.55 billion

(Adds details and context on IPO market in paragraphs 3, sector

context in paragraphs 4, 6, 10)

Nov 27 (Reuters) -

China's Pony AI said on Wednesday it had raised $260 million

in its U.S. initial public offering, valuing the robotaxi

startup at around $4.55 billion, the latest to bank on improved

investor sentiment in U.S. markets.

The company's performance could indicate how investors

approach China-based firms under the current U.S. administration

as both nations compete for dominance in autonomous driving

technology.

The IPO also comes after nearly two years of uncertainty

following Didi Global's delisting

amid regulatory backlash in China, with Beijing easing

tensions by resolving a long-standing audit dispute with the

U.S. accounting watchdog in December 2022.

However, the company faces other challenges, including

public skepticism about autonomous vehicles, data privacy

concerns, and competition from companies, including Elon Musk's

Tesla, which has promised to roll out driverless

ride-hailing services to the public in California and Texas next

year.

Pony AI has said that its U.S. operations will remain

"limited in scope" for the foreseeable future.

Other China-based companies, including EV maker Zeekr

and self-driving tech firm WeRide ( WRD ), also went

public in the U.S. earlier in the year amid a backdrop of the

country's IPO market picking up recently, with investors showing

renewed interest in promising tech startups.

Pony AI sold 20 million American depositary shares in

the IPO, priced to investors at $13 each. It also raised an

additional $153.4 million in concurrent private placement.

The Toyota Motor ( TM )-backed company's valuation has

come down from $8.5 billion two years ago.

It is expected to start trading on the Nasdaq later on

Wednesday.

Analysts caution that widespread robotaxi adoption could

take years due to safety and reliability challenges, although

China has been quicker to approve trials than the U.S.

Pony AI remains unprofitable as it invests in expanding

operations.