Electric Tractors Market by Type (Utility Tractors and Compact Tractors), Propulsion Type (BEV and HEV), Battery Capacity (Less than 15 kW and 15kW to 40 kW), Power Output, Application (Agriculture, Construction), and Geography - Global Forecast to 2031

Electric Tractors Market Size & Forecast

The Electric Tractors Market is expected to reach $857 million by 2031, at a CAGR of 7.7% from 2024–2031.

By Volume, this market is expected to reach 47.4 thousand units by 2030, at a CAGR of 9.2% from 2024–2031. The growth of the electric tractors market is driven by increasing government initiatives supporting the agriculture sector, increasing investments by leading automotive OEMs, and rising environmental concerns. However, the high initial investments and lack of adequate EV charging infrastructure restrain the growth of this market.

Furthermore, the growing adoption of precision farming techniques and growing scope in emerging economies are expected to offer significant growth opportunities for players operating in the electric tractors market. However, the range anxiety among consumers and the lack of reliable performance in heavy-duty applications may hinder the growth of this market.

Increasing Government Initiatives Supporting the Agriculture Sector Boosting the Demand for Electric Tractors

Governments around the world are implementing policies and regulations to support EV adoption. Financial incentives, such as tax credits and rebates, are being offered to encourage consumers to purchase electric tractors, and supporting initiatives in the agriculture sector help to deploy the growth of the electric tractors market. These incentives are helping reduce the upfront costs of various equipments and electric tractors in agriculture, making them more affordable for consumers. For instance, in December 2023, the Ministry of Agriculture in India played a pivotal role in enhancing the nation's agrarian output and ensuring food security. Recognizing the challenges faced by farmers, it has launched numerous schemes to promote sustainable farming and boost productivity. Initiatives like the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provide direct income support, while the Rashtriya Krishi Vikas Yojana (RKVY) aims for holistic agricultural growth. The National Food Security Mission (NFSM) focuses on increasing staple food production. Each scheme, meticulously designed, reflects the Ministry's commitment to transforming India's agricultural landscape and empowering its farming community.

Additionally, various governments have launched different initiatives in the development of the electric tractors market. For instance, in January 2024, the Government of India allocated USD 3,183 million (INR 2,64,000 million) for Phase III of the FAME Scheme (FAME-III). Out of this, USD 24 million (INR 2,000 million) is allocated to support the adoption of electric tractors in India. Additionally, to create interest in people for electric tractors, the government has made them cheaper with Goods and Services Tax (GST) and insurance discounts, which are as follows:

• Reduced GST Rates: GST on E-tractors collected by the Centre is 12% and E-tractors below USD 1 million are exempt from Tax Collected at Source (TCS).
• Insurance Discounts: Insurance premiums are around 2% of the electric tractors price, saving money for the people who own them.

In July 2022, the Energy Department in the U.S. announced that they would spend USD 96 million to reduce emissions by pushing forward the technology and charging infrastructure needed to electrify tractors, construction equipment, planes, trains, boats, and other off-road vehicles. The funding will also be focused on alternative fuels, which could further reduce emissions. Such factors help to deploy the growth of the market during the forecast period.

Click here to: Get Free Sample Pages of this Report

Key Findings in the Global Electric Tractors Market Study:  

Based on Type, the Industrial Tractors Segment to Register the Higher CAGR

Based on type, the global electric tractors market is segmented into utility tractors, compact tractors, row crop tractors, industrial tractors, and other vehicle types. The industrial tractors segment is projected to register the highest CAGR during the forecast period. The growth of this segment is driven by various factors, such as electric tractors producing zero tailpipe emissions, helping industries meet environmental regulations, and reducing their carbon footprint. Additionally, electric tractors are charged with using a variety of energy sources, allowing industries to diversify and choose cleaner and more sustainable energy options, reducing dependency on fossil fuels.

Based on Propulsion Type, the Battery Electric Tractors Segment to Register the Higher CAGR

Based on propulsion type, the global electric tractors market is segmented into battery electric tractors and hybrid electric tractors. The hybrid electric tractors segment is sub-segmented into pure hybrid electric tractors and plug-in hybrid electric tractors. The battery electric tractors segment is projected to register the highest CAGR during the forecast period due to the increasingly stringent emission standards, rising demand for increased fuel efficiency, growing demand for zero-emission vehicles, and a continuous reduction in battery prices.

Based on Battery Capacity, the 15kW to 40 kW Segment to Register the Higher CAGR

Based on battery capacity, the global electric tractors market is segmented into less than 15 kW, 15 kW to 40 kW, and more than 40 kW. The 15kW to 40 kW segment is projected to register the highest CAGR during the forecast period due to the increasing adoption of electric tractors for heavy load applications, the increasing number of favorable policies, incentives, and subsidies by several state governments, and the rising adoption of electric mobility in emerging economies.

Based on Power Output, the 30HP to 80HP Segment to Register the Higher CAGR

Based on power output, the global electric tractors market is segmented into less than 30HP, 30HP to 80HP, and more than 80HP. The 30HP to 80HP segment is projected to register the highest CAGR during the forecast period due to various factors, as the 30HP to 80HP range is well-suited for small and medium-sized farms. These tractors can handle a variety of tasks like plowing, tilling, and seeding, making them a versatile option for farmers and the increasing number of favorable policies, incentives, and subsidies by several state governments.

Based on Application, the Factories Segment to Register the Higher CAGR

Based on application, the global electric tractors market is segmented into agriculture, construction, logistics, airports, railways, commercial spaces, factories, and other applications. The factories segment is projected to register the highest CAGR during the forecast period due to the various factors as various state and regional governments offering incentives, such as tax breaks and subsidies, to encourage the adoption of electric vehicles, including EV tractors. These incentives can significantly reduce the upfront cost of purchasing an EV tractor, making them more attractive to various applications in factories.

Europe to be the Fastest-growing Regional Market

Based on geography, the electric tractors market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. Europe is projected to record the highest CAGR during the forecast period. The high growth of the market in the European region is majorly attributed to the increasing adoption of electric mobility in emerging economies, supportive government subsidies & tax rebates for promoting EVs, the growing adoption of autonomous delivery vehicles, and the increasing adoption of electric tractors for agriculture and commercial spaces services.

Electric Tractors Market: Competitive Analysis

The report includes a competitive landscape based on an extensive assessment of the key growth strategies adopted by leading players over the past three-four years. The key players operating in the global electric tractors market include Solectrac Inc. (U.S.), Deere & Company (U.S.), Escorts Kubota Limited (India), Alkè s.r.l (Italy), Yanmar Holdings Co. Ltd. (Japan), AGCO Corporation (U.S.), CLAAS KGaA mbH (Germany), Mahindra & Mahindra Limited (India), Dongfeng Motor Corporation Ltd. (China), Caterpillar Inc. (U.S.), Cummins Inc. (U.S.), AutoNxt Automation Pvt. Ltd. (India), Motivo Engineering (U.S.), Monarch Tractor (U.S.), Ztractor Inc (U.S.).  

Electric Tractors Market Report Summary:

Key questions answered in the report: