Electrification of Tractors Could Follow Tesla Model

The electrification of tractors could follow Tesla’s strategy for lowering the cost of production for electric vehicles.

Wright’s Law is a learning curve, showing how the more times a task is performed, the less time it requires on each subsequent iteration. As production becomes more efficient, costs decrease. 

This law forms the foundation for Elon Musk’s Tesla strategy — and the emerging electric tractor market, according to Shane Thomas, author of Upstream Ag Insights. Tesla entered the high end of the market and then achieved higher unit volume and lower prices with each successive model of car. 

Thomas compares the small tractor market to the high-end car market. “Small tractors are frequently used in orchards and horticulture. These segments are a great proving ground and could become a proxy of how fast electric tractors come to the large-scale market,” says Thomas. 

As electric tractor companies learn more about production and use of electric tractors, those lessons learned will apply to the large tractor market. Plus, Wright’s Law indicates lithium-ion battery cell costs fall by 28% for every doubling of units produced, according to Thomas.

“There are a lot less tractors produced than cars, but I assume there is still some synergy between the car market electric growth and what can be applied to tractors,” Thomas states. 

Editor’s Take:

You may recall that the final hour of AgRally 2022, in conjunction with National Agriculture Day, was devoted to “The Electrification of Agriculture”. During that segment, CAD CEO Pat Driscoll documented the many challenges facing companies entering this market. There are also significant hurdles to farmers/ranchers before they would adopt such technology on a large scale for their farm or ranch. We also promised that this would not be the last you would hear from us on this topic.  Stay tuned - more to come...