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如何看待Monarch Tractors与富士康的合作?






Monarch Tractors, a US-based startup manufacturing electric and autonomous tractors, recently announced that it is partnering with Foxconn (Hon Hai) to put its tractor into serial production in the US. Is this a disruptive move?

The King and i(Phone Manufacturer) 

Foxconn is, perhaps, best known for its role assembling Apple’s iPhone. Monarch Tractors is less well known but has put itself on the map in recent months. With industry backers like CNH, V.S.T. Tillers and Musashi Seimitsu it is well-positioned to develop its technology – both electric powertrain and autonomy – and also develop a competitive, market ready product.

Will Monarch be King? 

The compact tractor market is large and highly competitive in the US market. Catering to a range of applications – farmers, municipalities, hobbyists and more – the Association of Equipment Manufacturers (AEM) reported that the market for sub-40hp 2-wheel drive (2WD) tractors was over 200,000 units in the US in 2021. Can a startup that manufactures electric and autonomous tractors compete in this diesel dominated market?
On the face of it, it would appear to be an uphill struggle. The current product – the 40hp MK-V – costs $50,000 for the 2WD base model with an optional swappable battery available for $15,000. Equivalent powered ICE tractors are around $5-10,000 less expensive and often feature 4WD as standard.

But this doesn’t tell the whole story. First, there is the question of total cost of ownership (TCO). Electric tractors are a lot cheaper to run from a fuel and maintenance perspective compared with an ICE tractor. If a compact tractor is used for 1,000 hours per year, this might equate to an annual fuel bill of $2,000 at a price of $5/gallon. By comparison, it would cost around $800 per year to charge at $0.1/kWh. Given maintenance costs are lower too, there is a ‘break even’ TCO at around 5 or 6 years which could well be appealing for a significant number of municipalities or farmers who use their tractors heavily.

Second, there is little in the way of competition for Monarch, particularly with the ‘traditional’ brands like John Deere or Kubota. Solectrac and HummingbirdEV are the only other two, small start-ups, but with the support of Foxconn and its investors, Monarch is well positioned to take first mover advantage for zero emission tractors. Although the major manufacturers could introduce products (after all, John Deere has substantial experience with electrification) it is unlikely they will in the short term as margins are thin in the compact tractor segment and there will be pressure to prevent the erosion of profitability.

Third, there is a core of small holders and producers who are demanding zero emission solutions, particularly those with a focus on sustainability, organic farming or high-value crops (like grapes). TCO is less of an issue for these users and they are actively willing to pay more for a tractor that aligns with their ecological or social brand values.

Finally, programs like the CARB Core Project which aims to provide $125m in funding to kick-start decoarbonisation of the off-road market in California will help to incentivize early market adoption, allowing manufacturers like Monach to scale more quickly.

Our Take 

This partnership makes a lot of sense. The investment needed for a production facility is sizeable, particularly for a pre-revenue start-up like Monarch. Foxconn also benefits from adding another electrical vehicle brand to its stable, giving it more scale and additional experience building electrified powertrains.

Monarch is going to be able to tap into a growing market with a product that is built by a well-known and reliable partner, allowing it to focus on design refinement and sales channel development.

For more information, contact Alastair Hayfield, author of the upcoming report: Off-Highway Vehicles