Startup Spotlight: How Solectrac wants to drive on-farm sustainability with its electric tractors

*Editor’s Note: In July 2020, Solectrac won a $500,000 grant from the Bay Area Air Quality Management District as part of its Funding Agriculture Replacement Measures for Emissions REductiosn Demonstration Program.

A few decades ago, the idea of self-driving tractors may have sounded like science fiction. Today, tractors are taking on new futuristic shapes and forms. While a number of startups are fast at work developing autonomous tractors, others are tackling sustainability-related aspects of these fuel-hungry machines. Fossil fuels account for the largest source of greenhouse gas emissions related to human activities, according to the US Environmental Protection Agency.

“We never considered ourselves a startup when we began this journey years ago. We were solution-minded dreamers on a mission to produce our vision: a zero-emission electric tractor that would solve immediate problems for the tractor owner, like noise and exhaust, and help reduce the inputs of climate change – such as the CO2 emissions caused by diesel tractors,” a representative of electric tractor startup Solectrac told AFN.

Farmers also struggle with the cost of fuel. In 2017, US farmers spent $12 billion on fuel according to the US Department of Agriculture National Agricultural Statistics Service’s report on annual farm expenses. Diesel was the highest subcomponent cost at $7.6 billion.

San Francisco-based Solectrac has received some funding for its development work through grants totaling $730,000. The US-India Science & Technology Endowment Fund provided one grant while the US National Science Foundation provided the other. This cash helped the company develop its eUtility and eFarmer models. Now, Solectrac is running an equity crowdfunding campaign on StartEngine.

“Our investors are like-minded individuals who want to support our products and see them be mass-produced in the near future. We have received inquiries and interest from angel investors and venture capitalists, though we want to finish this fundraising round before engaging in this next level,” the representative said.

Read on to learn more about Solectrac and its electric-powered tractors.

AFN: What is your technology, and what is it trying to solve?

Solectrac: We produce and distribute 100% battery-powered electric tractors in the under-80 horsepower category. We are committed to providing powerful zero emission tractors to reduce our impact on climate change while improving the health and safety of tractor operators and farmworkers. 

Our electric tractors can be charged from renewable energy, thereby eliminating the need for the use of fossil fuels. This is particularly applicable to developing countries that want to leapfrog the fossil fuel infrastructure and go directly to renewable energy as their main energy source. We should also note that our electric tractors can be charged from any existing grid-tied 220 volt outlet as well.

What is your product?

Solectrac offers the eUtility electric tractor that can do the work of any two-wheel drive, 40 horsepower diesel tractor on the market. We distribute the Farmtrac Compact Electric Tractor that can do the work of any four-wheel drive, 30 horsepower diesel tractor. We have two more models under development: The two-wheel drive, 30 horsepower eFarmer designed for row crop farming and the four-wheel drive, 70 horsepower e70N designed for vineyards, orchards, and other high-horsepower utility applications. Solectrac also produces exchangeable battery packs that can be used to extend run time or for back-up power.

When did you launch, and what growth stage are you currently at as a company?

Our founder [Stephen Heckeroth] has been making electric tractors since the early 1990s and founded Solectrac to take the tractors into commercial production in 2012. In 2019, Solectrac became a California benefit corporation and attracted a team of professionals dedicated to taking our electric tractors to production. We are currently raising funds through an equity crowdfunding campaign with StartEngine.  

Who is your target customer?

The current 40 horsepower-and-under Solectrac models are suitable for the small and medium farm, equestrian, large greenhouse, and maintenance markets. The 70 horsepower model will be more specifically designed for vineyards with its narrow track width to be able to work between the vines. The increased horsepower will accommodate Category 2 [soil cultivation] implements, which is what our research shows is used in most vineyards.

What’s your view of competition in the autonomous vehicles and robotics space in agtech?

We have had several inquiries from interested parties to collaborate and understand that there is an increasing desire to automate. Solectrac is open to those options, and there are certainly applications where autonomous work would be desirable. At this time, we are focusing on providing simple, immediate solutions to replace as many diesel tractors currently in operation as possible. But our tractors will be an ideal platform for autonomous applications. That being said, we don’t see any direct competitors from the autonomous space.

What are some of the challenges that you’ve faced, and how did you overcome them?

Our biggest challenge is to get the word out that electric tractors are available and that their performance is equal to or better than diesel tractors. It took about 20 years for electric cars to take hold in society. We hope electric tractors will be accepted more quickly! The challenge of range and run time remains as battery technology evolves, but Solectrac has solved that with its patented exchangeable battery packs. Our technology allows you to swap depleted batteries for charged batteries more easily and more quickly than changing an implement.

Other than that, funding has probably been the biggest challenge. Also, the upfront cost of an electric tractor is higher than the upfront cost of a comparable diesel tractor, though our electric tractors largely eliminate the ongoing fuel and maintenance costs of diesel tractors. The lifetime cost of ownership of a diesel tractor, and therefore the payback period for purchasing an electric tractor, will vary depending on a farmer’s annual usage. The cost of the tractor will only be significantly reduced once we can order components in high volume. 

How have your investors added value beyond capital? What do you look for in an investor?

Since our investors are mission-aligned individuals, the value their voice brings to the product and educating their friends and colleagues about our electric tractors is priceless. Our biggest challenge is that people don’t know about Solectrac. So, having those voices out there is of great value to us. For any future fundraising rounds, we would be looking for mission-aligned investors.

Do you have any mentors that have assisted you along the way?

We’ve had several individuals who have guided us along the way with their business and marketing expertise, and we are grateful for their contributions. But for the most part, we are on the leading edge in the agriculture space and have had to chart this new territory on our own.

Any advice for other startups out there?

Know when the time is right to bring your product to market and be ready to work 24/7.