Monarch Tractor is facing a federal lawsuit from an Idaho dealership that claims the startup's $773,000 worth of "autonomous" tractors can't actually operate without human drivers. The case highlights growing challenges for the struggling AgTech company as it tries to pivot away from hardware manufacturing.
Monarch Tractor just got hit with a federal lawsuit that cuts straight to the heart of its business model. An Idaho farm equipment dealer is claiming the startup's supposedly autonomous tractors are anything but self-driving, despite paying over $773,000 for a fleet that was supposed to revolutionize farming automation.
Burks Tractor filed the breach of contract suit in September, and the case has since moved to federal court. The dealership purchased 10 electric tractors from Monarch in early 2024, expecting to become one of the California startup's first authorized dealers. Instead, they got what they're calling defective equipment that "continue to experience significant problems" and are "unable to operate autonomously."
The timing couldn't be worse for Monarch. The company has been hemorrhaging staff through multiple rounds of layoffs over the past two years, and the Ohio factory where Foxconn was building its tractors recently got converted into an AI data center. Now Monarch's trying to pivot toward software and tech licensing, but this lawsuit suggests the hardware problems run deeper than expected.
According to court documents obtained by TechCrunch, Monarch "expressly represented" during negotiations that the tractors would be fully autonomous with features that "were not limited by location or time." The startup even provided demo videos showing the equipment performing autonomous tasks to seal the deal.
Burks Tractor paid $773,088 for the fleet and financed the purchase, meaning they're still paying interest on equipment they claim doesn't work as advertised. Monarch delivered the first five tractors in April 2024, with the remaining five arriving in June. Problems started immediately, according to the complaint.
"Upon receiving the tractors, Burks Tractor discovered that the tractors did not perform as represented and were unable to operate autonomously," the lawsuit states. When the dealership flagged these issues, Monarch's sales team "worked with Burks Tractor to try to make the autonomous tractors work autonomously" but failed to deliver on the promise.
What's particularly damaging is that Monarch's own sales team allegedly admitted the limitations in writing. The complaint claims they acknowledged "both verbally and in writing" that the tractors' autonomy "was limited and the tractors were unable to function autonomously indoors." For a farming operation that needs equipment to work in barns, storage facilities, and covered areas, that's a deal-breaker.