Chinese autonomous driving firms gain ground in Europe with German approval and Uber deal

Two Chinese autonomous driving companies moved decisively into Europe last week, marking the most concrete evidence yet that Beijing's push to export self-driving technology is shifting from aspiration to commercial reality. Deutsche Bank initiated coverage of Momenta with a HK$400 price target, 38% above the previous close, citing the firm's dominant position in urban navigation on autopilot and a freshly granted German permit for nationwide Level 4 testing. Simultaneously, Pony.ai announced it would supply more than 2,000 robotaxis to Uber across five European cities, the largest deployment commitment by a Chinese autonomous vehicle operator on the continent to date.

Deutsche Bank backs Momenta after German regulatory breakthrough

The German investment bank's research note, released on Monday, described Momenta as the "No 1 independent autonomous-driving solution provider globally", particularly in the urban navigation on autopilot (NOA) segment where the analyst Bin Wang calculated a 64.5% market share. The company collaborates with nine of the world's ten largest automakers and counts Mercedes-Benz, Toyota and General Motors among its strategic shareholders. Deutsche Bank's HK$400 target implies a market capitalisation substantially above the level at which Momenta priced its Hong Kong initial public offering one month earlier, when it raised HK$5.9 billion (US$752 million).

The catalyst for the bank's optimism was regulatory rather than commercial. Last month, Momenta secured approval from German authorities to conduct nationwide urban-road testing of Level 4 autonomous driving systems. Level 4, defined as high automation, is the standard used in commercial robotaxi services; the vehicle performs all driving tasks in specific conditions without human intervention, though a human can still take control. Level 5 would represent full automation in all conditions. Germany's decision to grant a Chinese company such a permit is notable: the Federal Motor Transport Authority (KBA) has historically maintained stringent requirements for automated driving tests, and no other Chinese AV developer holds an equivalent nationwide urban authorisation.

Why Germany matters for autonomous vehicle deployment

Germany's regulatory framework for automated driving is among the most developed in Europe. The country passed its Autonomous Vehicles Act in 2021, establishing a legal basis for Level 4 operation in defined operational areas, and amended the Road Traffic Act in 2022 to permit driverless vehicles on public roads under specific conditions. The Federal Motor Transport Authority oversees type approval and testing permits. A nationwide urban testing permit allows a company to gather data across diverse traffic environments, dense city centres, suburban arterials, complex intersections, without applying for city-by-city exemptions. For Momenta, this accelerates the validation cycle for its urban NOA stack, which must handle European signage, pedestrian behaviour, tram interactions and narrow medieval streets that differ markedly from Chinese test environments.

The permit also carries political weight. Germany's automotive industry, Volkswagen, Mercedes-Benz, BMW, has invested heavily in autonomous driving, largely through partnerships and acquisitions rather than indigenous development. Momenta's strategic shareholders include two German OEMs (Mercedes-Benz holds a stake via its parent company) and the company's technology is already integrated into production vehicles sold in China. The German regulatory green light suggests authorities are comfortable with a Chinese software provider operating on their roads, provided the safety case meets domestic standards. That precedent may smooth the path for other Chinese AV firms seeking European market access.

Pony.ai and Uber target five European cities with 2,000 robotaxis

While Momenta's progress came through the regulatory front door, Pony.ai is leveraging a commercial partnership with Uber Technologies to scale rapidly. The companies announced last week a major expansion of their existing strategic alliance. Pony.ai, which counts Baidu among its backers, will provide Level 4 autonomous driving technology and operational experience; Uber contributes its ride-hailing platform, fleet management infrastructure and local market knowledge. The plan calls for more than 2,000 robotaxis to be deployed across five European cities, though the announcement did not name the cities or specify a timeline.

Pony.ai has been testing in Europe since 2022, initially in a partnership with the mobility provider Via in Hamburg. The company also holds a taxi licence in Luxembourg and has conducted trials in the Grand Duchy. The Uber deal represents a step change in ambition: 2,000 vehicles would constitute a fleet larger than Waymo's current deployment in any single US metropolitan area. For context, Waymo operated roughly 700 vehicles across San Francisco, Phoenix and Los Angeles combined as of early 2026. If Pony.ai achieves even half the stated target within two years, it would become the largest robotaxi operator in Europe by a wide margin.

The competitive landscape: Waymo, Tesla and European incumbents

European cities have so far been cautious hosts to autonomous vehicle trials. Waymo has not launched commercial operations in Europe. Tesla's Full Self-Driving suite remains at Level 2 (driver assistance) in Europe due to stricter type approval requirements than in the United States. European incumbents have pursued different strategies: Mercedes-Benz achieved Level 3 certification for its Drive Pilot system on German autobahns in 2023, but only at speeds up to 60 km/h and in traffic jams. BMW and Volkswagen have focused on highway automation and parking functions rather than urban robotaxi services. The French company Navya (now part of Gaussin) and the British firm Oxbotica have deployed low-speed shuttles in controlled environments, but neither has scaled to commercial urban robotaxi operations.

Into this vacuum, Chinese firms arrive with a distinct advantage: massive domestic datasets. Momenta's urban NOA system has accumulated millions of kilometres on Chinese roads, where traffic complexity, dense mixed traffic, aggressive lane changes, ubiquitous electric two-wheelers, unpredictable pedestrian behaviour, exceeds that of most European cities. Pony.ai has operated a commercial robotaxi service in Beijing, Guangzhou, Shenzhen and Shanghai since 2022, claiming over 3.5 million autonomous kilometres by mid-2025. The question for European regulators and consumers is whether Chinese-trained models transfer reliably to European conditions, and whether data governance, cybersecurity and supply chain dependencies raise strategic concerns.

Data governance and strategic dependency questions

The European Union's regulatory framework for artificial intelligence and data adds layers of complexity. The EU AI Act, which entered into force in August 2024, classifies autonomous driving systems as high-risk AI, requiring conformity assessments, risk management systems, data governance measures and post-market monitoring. The Data Act, applicable from September 2025, governs access to vehicle-generated data. The Cyber Resilience Act, entering force in 2027, imposes security requirements on connected products. Chinese operators must demonstrate compliance with all three regimes, plus the General Data Protection Regulation, before scaling commercial services.

There is also the question of mapping data. High-definition maps are essential for Level 4 operation. In China, surveying and mapping are restricted to qualified domestic entities; foreign companies cannot independently collect high-precision geospatial data. In Europe, the opposite dynamic applies: Chinese firms must either build their own HD maps, a costly, time-consuming process, or license from European providers such as Here Technologies (owned by a consortium of German automakers) or TomTom. Momenta's partnerships with Mercedes-Benz and BMW may provide map access; Pony.ai's route is less clear. Uber's own mapping assets, built over a decade of ride-hailing operations, could be a decisive asset in the partnership.

Financial markets signal confidence but deployment risks remain

Deutsche Bank's Buy rating and 38% upside target reflect a view that Momenta's technology lead and OEM relationships translate into a defensible revenue stream. The company's business model differs from pure robotaxi operators: it sells autonomous driving solutions to automakers (a Tier 1 supplier model) while also operating its own robotaxi fleets in China. This dual track provides revenue diversification, production vehicle contracts generate near-term cash flow while robotaxi operations build the operational expertise needed for overseas expansion. Momenta's IPO prospectus disclosed 2024 revenue of approximately 1.2 billion yuan (US$165 million), with the OEM solutions segment accounting for roughly 70%.

Pony.ai, by contrast, has pursued a robotaxi-first strategy. The company filed for a US IPO in 2024 but withdrew the registration statement amid market volatility. Its valuation in private markets was last reported at approximately US$8.5 billion. The Uber partnership provides a capital-light path to European deployment: Uber absorbs fleet procurement and operational costs, while Pony.ai contributes the autonomy stack. This mirrors the Waymo-Uber partnership in the United States (currently limited to Phoenix and Austin) but at a stated scale that far exceeds the American precedent. Execution risk is high: integrating two distinct technology stacks across five regulatory jurisdictions, each with distinct vehicle approval processes, insurance regimes and labour regulations, is a project of unusual complexity.