Electric Tractor Market worth USD 3.4 billion by 2030 – Exclusive Report by MarketsandMarkets™
Chicago, March 26, 2024 (GLOBE NEWSWIRE) -- *Electric Tractor Market** is estimated to grow from USD 0.7 billion in 2024 to USD 3.4 billion by 2030, at a CAGR of 28.3%, according to a new report by MarketsandMarkets™. *
Browse and in-depth TOC on *"Electric Tractor Market"
235 – Tables
55 – Figures
265 – Pages*
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*Report Attributes* *Details*
Market size value in 2024: *USD 0.7 billion*
Projected to reach 2030: *USD 3.4 billion*
CAGR: *28.3%*
Base Year Considered: *2023*
Forecast Period: *2024-2030*
Largest Market: *Europe*
Region Covered: Asia Pacific, Americas, and Europe
Segments Covered: Propulsion (Battery, Hybrid & Hydrogen), Capacity (<50, 51–100 & >100kWh), Chemistry (LFP & NMC), Hybrid Tractor (<50, 51–100 & >100HP), Function (Agriculture, Utility & Industrial) and Region
Companies Covered: Kubota Corporation (Japan), Solectrac (US), AGCO Corporation (US), CNH Industries NV (Netherlands), and Escorts Kubota Limited (India)
Growing stringency in emission norms and advancements in overall battery technology are primarily driving the developments in electric tractors. Electric tractors offer reduced carbon emissions and lower operational costs, making them attractive options. The electrification of tractors has challenges such as high initial cost, concerns about battery life and charging times, weight, and dawn-to-dusk demands. However, advancements in battery technology would further improve the performance and range of electric tractors, enhancing their practicality and usability in the field. Furthermore, government incentives and regulations to reduce greenhouse gas emissions further encourage the adoption of electric tractors, driving market growth.
*Lithium-iron phosphate batteries are projected to be the most preferred batteries for electric tractors over the forecast period.*
Lithium iron phosphate (LFP) batteries for electric tractors have surged recently due to safety advancements, cost-effectiveness, and government initiatives. One significant development is the increasing investments by key players in the agricultural machinery industry. For instance, Deere & Company started building a battery factory in North Carolina in August 2023, focusing on LFP batteries specifically for its electric vehicles and equipment. These investments signal a strategic shift towards sustainable agricultural practices, highlighting the importance of reliable battery technology in modern farming equipment. In November 2023, Faradion (UK) based LFP battery company partnered with Kubota Corporation (Japan) to explore LFP solutions for electric tractors, focusing on safety and performance enhancements.
Moreover, in December 2020, the European Union launched a USD 2.6 billion initiative to support developing and producing sustainable batteries, including LFP, to reduce reliance on critical materials like cobalt. OEMs like Solectrac from the US also showcased the “e70N Narrow” electric tractor in August 2021, which offered 70 HP motor power and had an LFP battery that runs for 3–8 hours, depending upon load. These types of batteries are usually preferred for small farming purposes.
LFP batteries use readily available and economical materials like iron and phosphate compared to nickel, manganese, and cobalt in Li-NMC batteries. Owing to this, the production cost of these batteries is lower than that of NMC batteries. Also, the LFP batteries offer significantly longer lifespans, often exceeding 5,000 charge cycles compared to 2,000-3,000 for Li-NMC. This translates to lower replacement costs and longer battery life.
The LFP batteries also have other advantages over NMC or NCA, like higher resistance to elevated temperatures. Though they require more physical space due to lower energy density, they offer safety benefits and stability, particularly at higher temperatures. Hence, these recent developments, benefits, and investments have given the LFP batteries the highest market share in the forecasted period.
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*>100 KWh is the fastest-growing battery capacity segment for the electric tractor market.*
Tractors equipped with battery capacities exceeding 100 kWh represent a transformative leap in the electrification of agricultural machinery, offering unprecedented power and efficiency for heavy-duty field operations - these higher battery capacities electric tractors are used in larger farmlands. Geographically, Europe has a higher availability of farmlands, which requires highly mechanized equipment and a higher battery capacity electric tractor, so the demand for >100 kWh battery capacity electric demand is higher in Europe. OEMs like Deere & Company (US), Tadus (Turkey), Fendt (Germany), and Case IH (US) are actively involved in developing >100 kWh tractor prototypes. For instance, Deere & Company showcased the SESAM (Sustainable Energy Supply for Agricultural Machinery) electric tractor prototype, which boasts a massive 130 kWh battery capacity that delivers up to 400 horsepower, comparable in power and performance to conventional diesel-powered tractors. Moreover, a German startup named Tadus also showcased their prototype, E-Traktor, in August 2023, an electric battery tractor with a battery capacity of 130 kWh. Also, a key player from Turkey named ZY Elektric showcased their prototype “King Size 320 HP” battery electric tractor with a battery capacity of 155 kWh. These high-powered battery capacity electric tractors are built for heavy-duty applications with higher battery ranges. Their products are not commercially available, but they have a potential future in the European market.
While electric tractors with >100 kWh battery capacities hold immense promise for sustainable agriculture, their adoption still faces cost and infrastructure limitations. However, manufacturers are making significant strides in overcoming these barriers. For example, Fendt (Germany), a leading agricultural machinery manufacturer, has announced plans to introduce electric tractors with battery capacities exceeding 100 kWh by leveraging advancements in battery technology and charging infrastructure. These electric tractors offer power, performance, and environmental benefits needed to meet the demands of modern agriculture with heavy machinery farming, which reduces reliance on fossil fuels and mitigates carbon emissions.
Overall, regulatory pressure, technological innovation, market demand, and the pursuit of operational efficiency and sustainability are expected to drive the adoption and advancement of >100 kWh electric tractors in the agricultural machinery market in the coming years.
*Americas to be the third largest region in the electric tractor market.*
The Americas region is estimated to be the third largest growing electric tractors industry, with key countries like the US, Canada, Mexico, Brazil, and Argentina contributing significantly. This growth is propelled by stringent environmental measures and upcoming emission regulations, compelling manufacturers to focus on electric and hybrid tractors. The region has a robust agricultural sector with a significant emphasis on technology and innovation. Electric tractors in the Americas have leveraged autonomous operation capabilities to reduce labor requirements and improve productivity. These tractors perform tasks such as plowing, seeding, and harvesting autonomously, guided by sensors and GPS systems. In December 2022, CNH Industrial (CNHI) revealed the New Holland T4 Electric Power, the first all-electric light utility tractor prototype with autonomous features. The tractor has a peak power of 120 hp and a maximum torque of 440 Nm. The roof of the tractor has sensors, cameras, and control units. CNH Industrial developed the tractor in collaboration with Monarch Tractor, a California-based tractor manufacturer focusing on electrification and autonomy.
America's governing body has provided several schemes to increase the adoption of electric tractors. For instance, US Federal Tax gives a USD 7,500 tax credit for purchasing qualifying electric vehicles, including electric tractors for some selected models, subject to eligibility criteria. Also, the California government has offered a scrappage policy for their old vehicles which California government gives the “Core Voucher” to buy electric tractors with the amount of USD 16,147.00 for e25G Gear, USD 13,753.00 for e25H Hydrostatic, and finally USD 28,000.00 for buying eUT+ Narrow. Also, the Central Coast Community Energy (CCCE) for the US is providing grants to substitute heavy-duty agricultural vehicles with fully electric equipment, where customers receive incentives covering 50 to 70% of the overall project expenses, capped at USD 75,000. Funding allocation operates on a first-come, first-served principle.
Moreover, the OEMs are also partnering with banks or financial institutions to offer low-interest loans, lease programs, or flexible payment plans tailored to the needs of farmers. For instance, Monarch Tractor (US) and CNH Industrial Capital (Netherlands) announced a financial services partnership on May 2023, which aimed to make Monarch's MK-V electric tractor more accessible to farmers by providing more comprehensive financing options through CNH Industrial Capital's expertise and established dealer network. Also, in January 2023, Solectrac (US) launched electric tractor financing and rental choices for buyers of 25 HP electric tractors, which are used for smaller tasks and operations in the US. Adding further, Solectrac in November 2022 also partnered with DLL (Netherlands), which is a global financial solutions provider which benefited Solectrac to access to DLL's extensive financial resources and expertise, making it easier for farmers and landscapers to finance the purchase of electric tractors in the US. Hence, these leveraging financing options have propelled the adoption of electric tractors in the Americas.
Vineyards are growing in the Americas, particularly in regions like California, Oregon, Washington State, and parts of South America such as Chile and Argentina due to favorable climate, soil, and tourism & hospitality. OEMs like Monarch Tractor in the US provide customized electric tractors tailored to the unique needs of vineyards in the Americas. Their MK-V series electric tractors are designed and customized to navigate the narrow rows and uneven terrain commonly found in vineyards, offering superior maneuverability and precision. Equipped with advanced sensors and AI-driven technology, these machines also autonomously perform tasks such as pruning, spraying, and harvesting, reducing labor costs and increasing operational efficiency for vineyard operators. Also, the local presence of key players such as Deere & Company, Monarch Tractors, Case IH, Fendt, Kubota Corporation, Solectrac, and International Tractor Limited are offering electric tractors in the Americas. Hence, all these factors have propelled the demand for electric tractors and made the Americas the second fastest-growing region.
*Key Market Players:*
The Electric Tractor Companies are Kubota Corporation (Japan), Solectrac (US), AGCO Corporation (US), CNH Industries NV (Netherlands), and Escorts Kubota Limited (India).
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