Electric tractors are becoming increasingly popular but given the cost differential from a comparable diesel tractor you might wonder if they are truly worthwhile. Asking how much is a tractor is really an inquiry into the long-term value and farm profitability that a tractor brings to a farm. When an electric tractor’s purchase price is coupled with subsidies like the Natural Resource Conservation Service Environmental Quality Incentives Program, commonly called the NRCS EQIP program (and often misspelled as the NRCS EQUIP program), the total operating cost and return on investment become quite compelling. This is particularly true for electric tractors that expand the boundaries of what a tractor can do for a farm.
What Impacts the Cost of Tractors?
Conventional tractors, long used as the backbone tool for farms of all sizes, have many price points based on a multitude of factors.
Farm Tractor Costs: Different Types & Sizes
There are many variations of tractors and different categories have a general price range depending on the size, complexity, unit, and manufacturer. Some price guidelines for conventional tractors include:
- Compact tractors of 40 - 60 HP range between $10,000 and $30,000 on average. These are well-suited for a variety of farm operations that include mowing, seeding, tilling, cultivating, and hauling small loads. Compact tractors are a little more agile and work better in narrow rows such as would be found in specialty crops. They are an ideal fit for landscaping, municipalities, and other large mowing operations such as sod farms.
- Utility tractors range from 70 - 150 HP and do a lot of versatile tasks requiring a more powerful capability than is provided by compact tractors. These range from between $20,000-$40,000.
- Industrial farm tractors are designed for the large-scale, heavy power tasks typically associated with row crops. These can cost between $25,000 and $50,000 on average. It’s worth noting that a brand new, industrial scale combine harvester can go for as much as $500,000.
- Four-wheel-drive tractors range from $30,000-$100,000. These provide extra stability and traction and come at a higher cost than their two-wheel-drive counterparts.
Electric Tractor Price Point
Electric landscaping equipment in the form of small riding lawn mowers, leaf blowers, and weed whackers have been around for decades but electric tractors have not taken hold in the ag sector until recently. In the last 15 years, advancements in EV passenger car technology have paved the way for electric agricultural tractors. Today, EV tractor manufacturers are overcoming challenges related to battery life and power to provide an EV option for compact and utility tractors.
Farmers of large, industrial-sized agribusinesses are quick to point out that an EV solution for large-scale operations demanded by row crops such as corn, wheat, and soy are not practical with current EV ag technology. These concerns are well-founded. But most of the workload demands of specialty farms are better suited for smaller, sub-100 HP agricultural tractors.
According to Our World in Data approximately 84% of the world’s roughly 570 million farms are smallholdings, farms that are less than two hectares in size. The U.S. mirrors this trend. The U.S. Department of Agriculture (USDA) says that in 2021 about 89% of all farms were small family farms. This size classification is based on annual gross farm income.
When it comes to pricing, both utility and compact electric tractors cost more than their diesel counterparts. Given the financial struggles of many farms, the electric tractor price often represents an initial barrier to purchase. Yet, despite their initial upfront costs, an electric tractor becomes more affordable to operate over time, which can improve farm profitability. This is particularly so when its purchase price is offset with a financial incentive like the NRCS EQIP program. To truly assess an electric tractor’s price and value, the contributions of the EQIP program become especially valuable when evaluating a tractor’s price point and how much it truly costs over the duration of long-term ownership. 
How Much is a Tractor?
Purchasing a tractor represents the initial cost output. In assessing the true cost of a tractor, it’s critical to weigh ongoing expenses incurred from normal, day-to-day operations and maintenance against how much its performance will return to the bottom line.
Total Operating Costs (TOC)
Operating, or variable costs, for a conventional tractor typically include diesel fuel, lubrication, air filters, and operator labor. Keeping diesel fuel on a farm comes with another array of expenses that negatively impact a farm’s annual operating budget. Diesel must be transported, delivered, properly stored, and used in compliance with regulations governing the safe handling and management of a highly combustible and toxic liquid. Staying compliant typically requires expenditures in time and money. Repair costs are associated with routine preventative maintenance and wear and tear.
According to statistics from the University of Illinois, it can cost anywhere between $31.20 per hour to over $130 per hour to run a conventional tractor depending on its horsepower, the cost of fuel, and the cost of labor. Iowa State University Extension’s Ag Cost Estimator, puts the TOC closer to $50,000, on average, to maintain or repair a tractor over a 15-year estimated average lifespan. Maintaining and continually operating a traditional tractor can take a big bite out of your farm budget. And this does not account for the health-related costs of inhaling diesel fumes. Nor does it factor in the repair costs of fixing any tractor-related damage to farm infrastructure such as vines, crop plants, and fencing. But as the backbone of a farm’s mechanical labor, farmers have had little choice in the matter. Electric tractors are giving farmers some options.
Electric tractors use rechargeable electric batteries to power their motors. As such, there are a few main factors that impact the average cost of an electric tractor. 
With fewer moving parts and no need for fuel, electric tractors cost less to keep powered and maintain. But a battery tractor raises some anxiety in the agricultural community. Farmers are concerned with how long the battery is going to last, how long an EV tractor takes to charge, and the expense of replacing the battery. Electric tractor manufacturers are overcoming these barriers with swappable batteries that last 8-15 years or longer, rapid charging, and in the case of Monarch’s MK-V, enough power to last up to a 14-hour workday based on farm, operation, and implement.
Total Return on Investment (ROI)
Within a category of tractors, the varying features and specs of a tractor will affect its price and electric tractors are no different. By virtue of relying on electric power, EV tractors save a farm in fuel-related expenses. As a tractor provides more functionality, ROI calculations increase for a better bottom line.
Monarch’s MK-V electric tractor has all the benefits of an electric tractor, but brings additional value to a farm through its connectivity as a smart tractor and driver-optional, autonomous capabilities. It also serves as a portable power wall. Moreover, the MK-V is engineered with software-enabled hardware that expands its capabilities with future updates and innovations making it an appreciating asset over the life of the tractor. In addition to fuel, maintenance, and labor costs, the MK-V’s Wingspan Ag Intelligence or WingspanAI technology saves farmers time and money in a myriad of ways, helping make their jobs easier and operations more productive and accurate. For instance, its Row Follow feature keeps the tractor centered in a row automatically, allowing the operator to focus on the implement and operation. The net result is a higher level of precision, greater labor efficiency, and reduction of costs associated with tractor-related damage to crops and infrastructure. .png?width=800&height=450&name=MT_April23_BobbyVineyards-PV-65-edited%20(3).png)
An investment in an electric tractor does require consideration for EV charging infrastructure. However, as a farm electrifies more of its equipment, the electric power economics of running an electric tractor becomes even more favorable.
USDA NRCS EQIP Program: Affording an Electric Tractor
Electric tractors cost more as an upfront purchase than their diesel counterparts. However, their ability to help a farm achieve long-term fiscal and environmental sustainability is attractive to many farmers. Despite this, the initial cost often represents a significant barrier to adoption. This is where the EQIP program can help. .png?width=800&height=450&name=MT_Feb24_DairyBlade-96%20(2).png)
The EQIP program falls under the jurisdiction of the U.S. Department of Agriculture (USDA). As such, the name NRCS EQIP program and USDA EQIP program are often used interchangeably (careful not to mistake it as the EQUIP program). At its core, the NRCS EQIP program is a conservation program that helps farmers integrate conservation into their working lands through subsidies and opportunities for a wide variety of sustainable initiatives, including the purchase of EV agricultural equipment through code 372. Because electric tractors have zero tailpipe emissions, the NRCS sees an EV tractor as playing an important role in agricultural conservation efforts.
When a farmer scraps a diesel tractor and replaces it with an electric tractor, the NRCS EQIP program may subsidize greater than 50% of the cost of that electric tractor. The result is lower TOC and an expedited ROI on their electric tractor. This is especially valuable for those investing in a Monarch MK-V. Through EQIP, farmers get a tractor that’s closer to the cost of a diesel, but with all the value and profitability associated with a smart, driver-optional, 100% electric tractor. 
By utilizing the NRCS EQIP program, farmers integrating EV tractors into their operations can achieve price neutrality compared to a diesel tractor at the time the rebate is issued. When the electric premium is subsidized via EQIP, farming with an EV tractor produces immediate savings and can save farm operations hundreds of thousands of dollars per tractor throughout its useful life. In addition to the savings generated by replacing a volatile and expensive fuel source such as diesel with a reliable and price-controlled source like electricity, adoption of EV tractors opens the door to additional value-added capabilities via exportable power. This can lead to not only the replacement of diesel tractors in farm operations, but diesel generators as well.
When an electric tractor is purchased with the USDA EQIP program, a farmer will be reimbursed after the tractor they are scrapping is verified as retired. This means a farmer must budget for paying the EV tractor’s full value upfront and being reimbursed by the USDA at a later date.
Farmer Frugal
Farmers face an array of formidable challenges. To stay in business, every purchase must be carefully assessed, weighing the value it will bring to a farm against its total cost requirements. Even without subsidies or grants for farm equipment, electric tractors are emerging as a solid strategy for improving agribusiness profitability. An ag subsidy like the EQIP program can make the financial equation go from compelling to an obvious choice, giving farmers a much-needed boost as they work hard taking care of their land, protecting their livelihood, and feeding the world.
References:
“Machinery Cost Estimates: Tractors.” University of Illinois.
https://farmdoc.illinois.edu/assets/management/machinery-costs/tractors_2017.pdf
“Estimating Farm Machinery Costs.” Iowa State University Ag Decision Maker.
https://www.extension.iastate.edu/agdm/crops/html/a3-29.html
“Comparing gasoline, diesel, natural gas, and electricity prices.” Energy Education. https://energyeducation.ca/encyclopedia/Comparing_gasoline,_diesel,_natural_gas,_and_electricity_prices
