Why Pony AI Stock Is Falling Hard Today

Shares of the Chinese autonomous-driving company Pony AI (NASDAQ: PONY) were falling this morning. The decline came after reports that TuSimple, a maker of self-driving trucks, sent sensitive autonomous-vehicle data to China even as it promised the U.S. government not to disclose information based on national security concerns, according to The Wall Street Journal.

Pony AI isn't part of the controversy, but the U.S. and China aren't exactly on the best of terms right now amid tariff concerns and geopolitical positioning. The reports about TuSimple are likely worrying some investors that the U.S. could take a more restrictive approach on how autonomous-vehicle data is collected by Chinese companies.

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Pony AI's stock was down by 13.8% as of 11:16 a.m. ET Wednesday.

A Pony AI self-driving vehicle. Image source: Pony AI.

Tensions are high between the U.S. and China

The U.S. is increasingly focused on protecting data and technology created here from being exported to Chinese companies and the Chinese government. That's led to restrictions on what types of semiconductors can be sold to China and protections against American social media data being exported to China.

That's why the Journal's report that TuSimple shared self-driving trade secrets with China could be affecting Pony AI's stock today.

Pony AI has permits to operate its autonomous vehicles in several states, and investors may be worried that TuSimple's supposed actions may reflect poorly on the company and potentially lead to increased government scrutiny.

Another factor that could be affecting the company's stock price today is that Chinese electric-vehicle (EV) companies are slashing prices. For example, BYD is one of the leading EV companies in China, and it just cut its vehicle prices by up to 34% for some models. Pony AI works with several Chinese EV companies, and investors may be concerned that a slowdown in the EV industry there could hurt its business.

Potentially more volatility ahead

With Chinese EVs facing headwinds, tariff uncertainty between the U.S. and China, and now concerns over autonomous-vehicle data, there are plenty of variables that could cause Pony AI's stock to remain volatile right now.

That doesn't mean it isn't a good long-term buy, but investors should be aware that the global automotive industry is facing significant pressures right now, and that's spilling over to companies connected to the industry, including those in self-driving tech.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.