Monarch Tractor, a US startup renowned for its autonomous electric tractors, is facing significant challenges that could reshape its future. According to an internal memo obtained by TechCrunch, the company is considering the dismissal of up to 102 employees and is even contemplating a potential closure. This development follows recent layoffs at its California headquarters and within remote teams in India and Singapore. At the end of 2024, Monarch employed around 300 people, but more than 10% of the workforce had already been let go as part of a restructuring effort. Adding to the turmoil, co-founder Mark Schwager, a former Tesla employee, stepped down from day-to-day leadership earlier this year, although he remains on the board of directors.
Monarch Tractor was founded in 2018 by Carlo Mondavi, a former top executive at Tesla’s first gigafactory and the son of a winegrower. The startup has raised at least $220 million, with $133 million coming in 2024 alone. Its initial goal was to develop a fully electric, autonomous tractor tailored for vineyards and orchards. The company claims to have delivered around 500 tractors. However, at the end of 2024, Monarch announced a strategic shift. The focus expanded to making the tractors suitable for a broader range of tasks, such as feed management on dairy farms and golf course maintenance. Concurrently, the company increasingly turned its attention to software and licensing its autonomous technology to other manufacturers.
The internal memo reviewed by TechCrunch suggests a further departure from in-house production. Earlier this year, Monarch lost Foxconn, its manufacturer based in Ohio. The new business plan aims to transition towards fully commercialized Software as a Service (SaaS) and other software solutions that can be sold directly to customers and component manufacturers. However, Monarch’s HR department warns that this transition carries the risk of the company having to close.
In response to the news, Praveen Penmetsa, CEO of Monarch Tractors, stated that more than 70% of the company’s revenue already comes from licenses. He emphasized the need for this segment to grow further in 2026. The strategic shift comes at a time when Monarch’s technology is facing scrutiny. One of its first dealers, Burks Tractor in Idaho, has filed a lawsuit claiming that the delivered tractors were ‘defective’ and caused ‘significant problems’ after being delivered in 2024. The main complaint is that the machines allegedly could not operate autonomously in practice. Monarch denies these accusations in court filings.
The combination of technical disputes, the loss of Foxconn as a manufacturer, and substantial restructuring raises questions about the feasibility of Monarch’s original model as a producer of autonomous tractors. The company’s future now hinges on its ability to successfully transition to a software-focused business model, a move that, if successful, could redefine its role in the agritech industry.