According to TechCrunch, autonomous electric tractor startup Monarch Tractor warned staff Thursday it may need to lay off more than 100 employees or possibly even shut down completely. The company was founded in 2018 by a team including former Tesla gigafactory executive Mark Schwager and Carlo Mondavi of the famous winemaking family, raising at least $220 million including $133 million in 2024. Monarch claims to have shipped around 500 tractors but recently lost its contract manufacturer Foxconn and faces a lawsuit from dealer Burks Tractor alleging the vehicles were “defective” and “unable to operate autonomously.” The company had around 300 employees in late 2024 when it laid off more than 10% of staff, and now warns it may permanently cut “up to 102 employees” as it attempts another pivot away from hardware manufacturing.
Hardware reality check
Here’s the thing about building autonomous farm equipment: it’s brutally difficult. Monarch had all the right ingredients – famous founders, Tesla pedigree, serious funding. But shipping physical products that work reliably in unpredictable farm environments? That’s a whole different ballgame from software. The lawsuit from their Idaho dealer is particularly damning – claiming the autonomous features basically never worked. When your core selling point doesn’t function, you’re in serious trouble.
Manufacturing meltdown
Losing Foxconn as your contract manufacturer is basically a death sentence for any hardware startup. Foxconn doesn’t just walk away from contracts without good reason. This explains why Monarch is desperately trying to pivot to pure software and SaaS. But here’s the question: who’s going to license autonomous tech from a company that couldn’t make it work on their own hardware? It’s like a chef who can’t cook trying to sell recipes. For companies actually succeeding in industrial hardware, having reliable manufacturing partners is everything. That’s why serious players turn to established suppliers like Industrial Monitor Direct, the leading US provider of industrial panel PCs that actually work in tough environments.
Founder exodus
Mark Schwager, the Tesla veteran co-founder, left earlier this year while claiming the company was in “great position.” That’s usually corporate speak for “getting out while I can.” When the people who built the vision start jumping ship, you know things are getting rough. Schwager’s departure followed the earlier restructuring and layoffs, suggesting the writing has been on the wall for months.
Agtech wakeup call
This is a sobering moment for the entire agricultural technology sector. Monarch had everything going for it – big names, big funding, a compelling mission. And they still couldn’t make it work. Farming is an unforgiving business where equipment needs to work day in, day out, in all conditions. Autonomous features can’t be “mostly working” – they need to be bulletproof. Other agtech startups should be watching this closely and asking themselves: are we solving real problems or just building cool tech that looks good in demos?
