Electric tractors are non-polluting and considerably cheaper to run for farmers, but the penetration of EV technology in this segment is much lower than that of PVs and CVs. What is the reason behind this, and how can it be fixed?
09 Jun 2025 | 484 Views | By Yukta Mudgal
Nikunj Korat was running an electric fencing business in the villages of Gujarat, but his interest in innovation and desire to contribute to the farming community kept pushing him to do more. The rise of e-rickshaws in 2016 gave him the idea to make an electric tractor. This led him, ...
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Nikunj Korat was running an electric fencing business in the villages of Gujarat, but his interest in innovation and desire to contribute to the farming community kept pushing him to do more. The rise of e-rickshaws in 2016 gave him the idea to make an electric tractor. This led him, along with his brothers, to start an e-tractor company called Shree Marut E-Agrotech in 2017.
The venture was a bold move as its commercial sales began just eight months ago, following limited testing or piloting deployments, and is yet to make profits. With an initial investment of Rs 1.2 crore, the company began building e-tractors of 18 HP and 28 HP, and has an annual production capacity of 50 units.
“We can scale further, but we need government support,” said Korat. In India’s ongoing push to electrify on-road vehicles, off-road machines like tractors and waste-picking vehicles remain largely overlooked, a gap that is evident in central government incentives under schemes like FAME.
The PM-eDrive scheme, a revised version of the earlier FAME schemes, currently offers subsidies for electric two-wheelers, e-buses, and e-ambulances. Previous FAME schemes also included electric passenger vehicles. However, at no point have e-tractors been included under these subsidy schemes, a decision that many in the sector are beginning to question.
“Only if both central and state governments give subsidies will we be able to gain some confidence,” Korat said.
Though India is the largest tractor manufacturer in the world, with sales of over a 1.6 million tractors in 2023-24, only four units were classified as electric tractors sold in the same year, said Aravind Harikumar, researcher at the International Council on Clean Transportation who has spent the last few years tinkering with tractor prototypes and combing through policy documents.
According to Aravind, government policies cannot wait for customer preferences to evolve, but instead, must play a part in their evolution. "The [current] scheme is customer-centric," he points out. "There was no demand for electric buses at first, yet the government stepped in and began procuring them not because it made immediate market sense, but because it made environmental sense. That same logic should apply to farm machinery."
Tractors are used extensively across rural India, and frequently perform tasks beyond farming, such as transporting passengers and goods. However, their diesel engines typically lack advanced emission control technologies, resulting in high levels of pollutant emissions. Experts point out this contributes to deteriorating air quality and poses significant risks to public health in the hinterlands.
“There are two key issues when it comes to diesel tractors,” said IV Rao, distinguished fellow at The Energy and Resources Institute. “First, when tractors are used for operations like ploughing, the emissions are very high, leading to serious health concerns. Second, the energy cost of diesel tractors is significantly higher than the electric ones.”
E-tractor manufacturers are unable to understand why they’ve been left out in the new PM e-Drive scheme, especially considering how much diesel conventional tractors consume. “Tractors are one of the biggest diesel guzzlers, and yet the Centre has not included any subsidy for e-tractors in the PM e-Drive”, said the founder of an e-tractor company.
Pankaj Goyal, Co-founder and Chief Operating Officer of AutoNxt Automation echoed these concerns, adding that “Demand for e-tractors has to be created.” AutoNxt, which already has close to 100 electric tractors deployed across India, is witnessing strong uptake. “We have ongoing orders and a monthly production capacity of 200 tractors. This year, we’re targeting 1,000 units,” he said.
“When a startup is ready to scale, to ramp up production, to take green technology forward there’s little or no government schemes that give us a cost or innovation advantage. As a technology startup, we don't feel supported by the government policies” he said.
AutoNxt has built its electric tractor almost entirely in India, motor and battery included, except for cells and a few other electronics that are imported. “We have been conveying our message to the Government through various exhibitions, panel discussions, forums, but when the PM-eDrive scheme was being designed, we specifically requested that electric tractors be included but they weren’t,” Goyal said.
He explained the potential return on investment (ROI) clearly: “A typical diesel tractor with features like power steering costs around Rs 7–8 lakh and consumes about 3–4 litres of diesel per hour. For an average annual usage of 1,200 hours, this translates into a fuel bill of Rs 3.5–4 lakh. In contrast, AutoNxt’s electric tractor consumes electricity worth under Rs 50,000 for the same usage.”
“You save over Rs 3–3.5 lakh annually. The extra money you pay for a battery is recovered in under two years. After that, it’s essentially free,” Goyal said. “Almost 35% of a farmer’s production cost is diesel. If that’s reduced to one-fifth, it can transform their profitability.”
Despite this, policy remains misaligned. “The agriculture sector consumes more diesel than buses, yet buses are incentivized heavily while tractors are ignored. The tractors are a means of livelihood earning for a large population with low income and e-Tractor can really change their productivity if supported well by the government.” he said.
The point is highlighted by Hemanth Kumar, Co-Founder and CEO of Bullwork Mobility, who worked with Ola and Ather before launching his own e-tractor venture: “Farmers might spend Rs 10 lakh upfront on a larger machine, but what often goes unnoticed is the recurring expense—nearly Rs 4 lakh annually on fuel and maintenance. Over a 10-year period, that adds up to Rs 45–50 lakh. That’s where e-tractors can make a big difference. The total cost of ownership could drop to nearly a third, offering massive savings in the long run.”
Is Lack of Charging Infra the Problem?
Rahul Vashisht, a farmer and mechanical engineer from Aligarh, dismisses the idea that poor charging infrastructure is an impediment to the popularity of electric tractors. “Almost every village in Uttar Pradesh has farms and a reliable electricity connection. So, charging isn’t really a concern.”
Rather, he said, farmers are smart and open to adopting anything that helps them save money in the long run. “People in villages need demonstrations and more exposure to new technology—they’re smart, just need the right information.”
However, another, related challenge may have something to do with the low penetration levels of electric tractors: the tractor equivalent of ‘range anxiety’. Typically, a diesel tractor can plough around 10 acres in a day. To match this, an electric tractor will need to come with an 80 kWh battery.
However, most electric tractors come with batteries of 20-40 kWh due to cost reasons, and this is enough for only about 2.5-5.0 hours of work. Once the charge is exhausted, the farmer has no choice but to wait for 4-5 hours to replenish it, and this may not always be practical during the intense, ploughing season.
However, according to Aravind, this obstacle too can be overcome by using a judicious mix of electric and diesel tractors: He points out that in many villages, smallholder farmers don’t own tractors but rent them, often with a driver, and pay per task—whether it’s ploughing or sowing, the rate is fixed per acre.
“You don’t need to electrify the entire fleet,” he said. “Deploy e-tractors where terrain and tasks allow, and use diesel where necessary. This hybrid approach leads to real cost savings over time.”
Beyond Farms
Electric tractors may be rooted in agriculture, but their utility stretches far wider into e-waste management, construction sites, factories, airports, and even biomass logistics. These machines are quietly proving that their capabilities go well beyond tilling fields.
The biomass energy sector, for instance, is a sprawling industry that relies on a web of contractors to collect and transport agricultural residue like parali (crop stubble) from fields to compressed biogas (CBG) plants or biomass energy units. These contractors are doing heavy-duty work, bundling the waste, hauling it in bulk, often over long distances.
“If these jobs were done using electric tractors,” explained Goyal, “It would not only cut costs but reduce pollution in a sector that’s supposed to be green.”
And then there’s sugarcane transport. Every cane farmer must send their harvest to a sugar mill, a labor- and fuel-intensive process. With diesel prices rising, this becomes a major burden. But many of these sugar mills already generate their own electricity, often by burning agricultural waste or using renewable energy sources like solar or biogas.
“For them,” Goyal added, “charging an e-tractor is almost free. The cost of running one on in-house or solar power can drop to under Rs 3 per unit [of electricity], that’s one-tenth the cost of diesel.”
That changes the equation entirely. What looks expensive on paper becomes highly economical in the right ecosystem. For sugar mills and CBG plants, e-tractors don’t just make financial sense, they align perfectly with their circular economy model.
These industrial environments with fixed routes, regular usage, and access to on-site charging are better suited for early adoption, the AutoNXT co-founder said.
The Diesel Consumption Angle
Besides the obvious benefits of lower operating costs, electric tractors are also seen as the right choice due to their potential to reduce India’s oil import bill.
High Speed Diesel (HSD), which is used in tractors, has a share of 38.2% in total oil consumption, according to a report by the Petroleum Planning and Analysis Cell (PPAC).
HSD’s consumption during the year 2024-25 with a volume of 91.41 MMT grew by 2% of which the agriculture and food processing sector contributed 4%, in the “direct sales category”.
Meanwhile, India’s crude oil import burden continues to grow. According to PPAC the country’s crude oil imports rose by 4.2% to 242.4 million tonne (MT) in 2024–25. Oil import dependency climbed from 88.6% in March 2024 to nearly 90% by March 2025. The import bill increased from $156.3 billion in 2023-24 to $161 billion in 2024-25.
Nitin Gadkari, the minister of Road Transport and Highways, has consistently emphasized the need to reduce this dependency. At an event in December 2024, he shared how he tried to persuade tractor manufacturers to adopt alternative fuels, especially after they resisted stricter emission norms due to cost concerns.
“I am happy that we introduced Euro 6 emission standards for cars and buses. These standards were also set to apply to tractors, but tractor manufacturers warned that it would increase the vehicle costs by Rs 1 lakh to Rs 1.15 lakh,” Gadkari said.
“In response, I offered a condition that I would agree to defer the implementation of the new norms if they adopted alternative fuels like CNG, electricity, or ethanol in flex-fuel engines for tractors. I am pleased to report that companies have successfully implemented these changes.”
To reduce emissions and improve fuel efficiency, the central government is pushing for the adoption of TREM-V emission norms. Currently, Indian tractors above 50 HP comply with TREM-IV norms, while the majority — those below 50 HP — still operate under the older TREM-IIIA standards. These norms, modeled on European regulations, are aimed at curbing carbon emissions.
While the Ministry of Road Transport and Highways has supported broader electric mobility efforts, the future of e-tractors mainly falls under the purview of the Ministry of Heavy Industries and the Ministry of Agriculture and Farmers Welfare. These ministries are yet to take focused steps to address the specific needs of the e-tractor sector.
How Traditional Tractor Makers View E-Tractors
“The existing manufacturers have already made substantial investments to meet earlier emission regulations, so it’s understandable that they’re looking to make the most of those commitments while continuing to serve the current market,” said IV Rao of TERI. “That doesn’t mean they lack interest in electric vehicles, including tractors. In fact, many have already developed or are actively working on them.”
However, for now, diesel tractors remain more affordable and continue to sell well, so manufacturers are understandably focused on them.
In the race toward electric mobility, India’s tractor majors aren’t exactly leading from the front. Instead, they’re watching cautiously and analytically. Mahindra & Mahindra, the country’s largest tractor maker, already has an electric tractor ready. Developed, tested, and shelved for now.
“We’re ready from a product development standpoint,” said Rajesh Jejurikar, Executive Director and CEO of Mahindra’s Auto and Farm Sector, answering to Autocar Professional in a recent quarter result call. “Even in mature markets like North America, we haven’t seen real traction. None of the existing electric tractor players have picked up momentum.”
Despite Mahindra’s strong global presence particularly in the US, where sustainability trends are often ahead of India’s, the market signals aren’t convincing enough.
“We’re not converting our development work into a launch-ready product just yet. We’ll wait until the market is more prepared,” Jejurikar said.
In an earlier conversation, Hemant Sikka, the then president of Mahindra’s farm equipment division, now the MD & CEO - Mahindra Logistics, had pointed to the company’s Oja platform, a lightweight tractor aimed at smaller farms and said that it was built with future electrification in mind.
“Oja is designed to accommodate a zero-emission powertrain,” Sikka had said. “But the timeline is undefined. EV adoption in the tractor segment will take more time.”
Escorts Kubota Ltd (EKL), another legacy name in India’s tractor industry, has been making electric tractors and mostly exporting them. “We’ve sent units to Western and European markets,” Whole-time Director and Chief Financial Officer, Bharat Madan said.
“Initially, we tried the Indian market too, but demand dropped quickly.”
EKL estimates having exported between 1,000 to 1,200 e-tractors so far. While the company is pursuing domestic certification, it isn’t banking on immediate demand.
“Even in developed regions like the U.S. and Europe, the adoption curve is flat. If the market hasn’t taken off there, India is still a long way from catching up,” Madan added.
The reasons are familiar: price, infrastructure, and practicality. “Until India builds a strong battery ecosystem and supporting infrastructure, the price barrier will remain,” Madan said.
Upfront Cost Barrier
Manufacturers are already demonstrating that e-tractors can match diesel ones across a range of demanding tasks from tilling and sowing to hauling and crop residue management. These machines can support multiple implements and offer an experience that’s familiar, but far more efficient.
While electric tractors are more cost-effective in the long run, their upfront price is nearly double that of diesel tractors, mainly due to the high cost of lithium iron phosphate (LFP) batteries.
The high upfront cost continues to put these machines out of reach for most small and marginal farmers. But Aravind says, “Early e-tractor adopters today are not necessarily wealthy, but more often tech-savvy, curious farmers, or contractors looking to cut fuel costs and try new approaches.”
Rao said the real challenge for electric tractor manufacturers is ensuring performance during core agricultural tasks. A farmer typically needs the tractor to run continuously for four to five hours. To meet that demand, battery size and cost increases substantially.
One of the solutions to curtail the cost barrier is the easy financing of e-tractors. Goyal emphasized the critical role of financing in scaling the adoption of electric tractors. “A tractor is an industrial machine that someone buys to earn a livelihood. So, when an e-tractor costs slightly more than a diesel one, financing becomes even more essential. When our product is already approved and homologated by the government, why can’t we get loans from public sector banks?” he asked.
A Ray of Hope
The PM-eDrive scheme, launched last year, outlines demand incentives for electric vehicles such as e-2 wheelers, e-3 wheelers, e-ambulances, e-trucks, and other emerging EV categories. It also highlights a commitment to modernize and upgrade testing facilities under the Ministry of Heavy Industries (MHI), with an approved outlay of Rs780 crore to support the adoption of new and emerging technologies—part of a broader push toward green mobility.
While the scheme doesn’t specifically mention electric tractors, the emphasis on “emerging technologies” offers a window of opportunity. “The PM-eDrive scheme hasn’t issued a specific notification for tractors yet,” says Aravind. “But the clause about ‘emerging technologies’ means the door is open. The government isn’t saying no—they just haven’t been asked loudly enough.”
And that, he believes, is where the next chapter begins—not with a bang, but with a steady, determined push from innovators who are unwilling to wait.
Electric powertrains, he notes, are far more efficient, drawing lessons from other sectors like two-wheelers, buses, and delivery vehicles. "It’s only a matter of time before these benefits show up in agriculture too," Aravind says with quiet confidence.
State Subsidies: A Fragmented Lifeline
Electric tractors may not have found a place in India’s national subsidy programs yet but there are glimmers of possibility through state subsidies.
Instead, the lifeline came from a few progressive states. Haryana stood out as a rare bright spot. In its 2022 EV policy, the state government committed a 50% subsidy (up to Rs 5 lakh) for the first 1,000 electric tractors. That was enough to get startups moving.
“We’re working closely with the government of Haryana,” said one founder. While states like Haryana have taken the lead with subsidy programs, most states still lack specific policies. According to him, this lack of consistent support is especially damaging for startups transitioning from early to growth stages. Other states began taking tentative steps too. Andhra Pradesh and Madhya Pradesh introduced modest incentives, too.
“There’s no clear custodian for e-tractors,” explained a policy analyst. “Are they farm equipment or clean transport? Until that’s resolved, policy will remain fragmented.”
This bureaucratic gap has left startups to fend for themselves. Still, many are undeterred. They believe that piloting in supportive states can build the evidence needed to change minds and policies.
For now, the startups are holding the line running pilots, requesting local governments, and slowly building momentum. “We’ve sent some of our tractors to Haryana for testing,” said Nikunj of Marut, with cautious optimism. “We’re not profitable yet, but we believe in the long game.” And in the long game, state subsidies, even if scattered, are proving to be the scaffolding on which this young industry might just find its footing.