Solectrac, a manufacturer of electric tractors based out of Santa Rosa, Calif., has been declared as “assets held for sale” by its parent company, Ideanomics. A global electric vehicle company, Ideanomics said in its second quarter earnings filed Aug. 4 that 4 of its subsidiaries, including Solectrac, had met the criteria to be classified as assets held for sale.
Ideanomics acquired a 15% stake in Solectrac in October 2020 and 100% ownership in June 2021, spending a total of $25 million to acquire Solectrac. Solectrac was founded in 2012 and sells 3 models of electric tractors ranging from 25-75 horsepower.
Solectrac Vice President of Sales and Marketing John Grooms said the company is looking for an investor with ag or electric vehicle experience and aims to have the transaction closed by the end of the year. Grooms said at this point, the company won’t rule out any proposals.
“It'll [a new investor] mean a lot more stability. I think it'll mean a lot more capabilities of getting our new products to market faster to help our dealers grow faster and increase sales. So, I think it will also help us in the way that we market our go-to-market strategy. We can expedite that and speed that up a little bit.”
Grooms said Solectrac currently has over 100 stores in its dealer network but is still looking for more dealers. He added, however, that they’re being more selective and looking for dealers who understand their go-to-market strategy is different than it would be for a diesel product.
Grooms said the company always knew there would be challenges with the acceptance of electric tractors in the ag equipment market but that there are still plenty of customers. He said it's possible electric tractors could make up 15% of the under 100 horsepower tractor market in 5 years.
“It's kind of like there was with Tier 4 emissions. It's just something that the government mandated and once everybody got behind it, it became a non-issue. I still think there's plenty of people that are seeking regenerative energy and a green alternative out there that's going to carry us through, while I do think the diesel market is going to continue to shrink.”
Ideanomics reported total revenue for Solectrac in 2022 was almost $11 million, up from $1.8 million in 2021. However, net loss for 2022 was $15.2 million, also up from a net loss of $1.9 million in 2021. Ideanomics has not reported Solectrac’s revenue thus far for 2023.
Ideanomics said in its second quarter filings that its Solectrac business is in the development stage, is not profitable and is not expected to be profitable and cash generative in the short to medium term.