Agriculture is a cornerstone of the Indian economy, employing 42% of its workforce and contributing between 17-18% of the country’s GDP. The tractor plays a critical role in India’s agricultural sector and despite very low levels of farm mechanisation in general, India has extremely high levels of tractor penetration, with tractors used in agriculture making up over 85% of all farm equipment in India. This is due to the tractor not only being used for agriculture purposes, but also for the farmers daily transportation and other commercial use.
India is the world’s largest tractor market, with volumes having grown from ~500,000 units in FY17 to over 880,000 units in FY24 (20x volumes when compared to Japan). This is further expected to expand to over 1mn new vehicles being sold by 2028, as use of tractors in farms is a vital strategy to ensure improved efficiency, reduced labor dependency, and increased crop yields.
However, despite relatively small volumes, traditional diesel-powered tractors dominate the tractor market and actually consume ~7.4% of India's annual fuel supply. For quick reference, a diesel tractor consumes 0.2-0.3 litres of diesel per HP per hour, depending on the tractor's load and efficiency. This means a 100HP tractor would consume 25 litres of diesel worth over Rs 2000 per hour of operations!
Hence, diesel consumed in tractors account for a significant portion of agricultural costs, in addition to having high maintenance costs and also contributing to greenhouse gas emissions. The Total Cost of Ownership (“TCO”) for even a low powered 20HP diesel tractor over a 3 year period will be over Rs 9 lakhs and unlike many other vehicle categories, the TCO argument heavily favours use of electric tractors. Finally, due to the high fuel consumption and operating costs, a single type of tractor can not fulfil all use cases and hence, farmers are forced to use different HP machines for various use cases.
Moonrider is building smart, heavy duty electric tractors aimed at providing farmers and fleet operators with a sustainable alternative to traditional diesel powered tractors, while delivering significantly superior economics for them. This digital first product will not only lower operational costs, but also a single high HP electric tractor can potentially be used across multiple use cases, due to extremely low cost of fuel (as electricity is highly subsidised or even free for farmers).
Moonrider products are positioned in the value bucket, targeting developing countries and higher HP categories. The Company aims to differentiate itself from legacy players on the back of a technology led, data first approach, where the farmer is connected to his tractor at all times via a farmer facing applications, while delivering the following key value propositions:
- Upfront price parity with diesel tractors
- Lower TCO: 50% cheaper to own and maintain
- Sufficient runtime: Heavy duty applications with min 5 hours runtime
- Fast charging: 30 min fast charge
- Digital solution: GPS, IoT enabled along with AI powered analytical solutions
The founding team at Moonrider has been busy doing market research and developing key parts of the technology stack, which has enabled solving some critical challenges such as lowering upfront cost of their electric tractors from being 1.5-2.0x of their ICE counterparts. The Company has recently been conducting field trials with their design validation builds, while working on their unique GTM strategy along with their partners, to whom Moonrider recently delivered its first unit.
We have been on the lookout for the right team, product and GTM to solve for electrification of tractors and when we came across Anoop and Ravi from Moonrider, we knew we had found our partners. Their vehicle engineering and EV R&D backgrounds from the Volvo Group, Ola Electric & Olectra BYD, combined with the team’s strong supply chain and engineering expertise makes Moonrider our most exciting recent investment.
You can learn more about Moonrider at https://www.moonrider.ai/.
