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 publicly traded global electric vehicle company, Ideanomics said in its second quarter 2023 earnings report filed Aug. 4, 2023, 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 $24.7 million to acquire Solectrac. Solectrac was founded in 2012 and currently sells 3 models of electric tractors ranging from 25-75 horsepower. Solectrac announced its first dealer — 11-store Washington and Oregon New Holland dealer Brim Tractor — in March 2022 and reported having over 35 dealers with 73 stores in March 2023. 

Solectrac’s Barriers

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 gave a breakdown in its second quarter filings of the principal factors impacting the parent company’s financial performance, one of which was its struggling EV business. Ideanomics said its Energica (electric motorcycles) and Solectrac businesses “are in the development stage, are not profitable and are not expected to be profitable and cash generative in the short to medium term. 

“Consequently, the EV businesses are highly dependent on the company’s ability to access the equity and debt capital markets to provide sufficient cash for these businesses to continue to develop their products, build large-scale manufacturing capacity and invest in sales and marketing infrastructure,” the filing said. “The availability of capital to fund growth in 2022 and 2023 has constrained the ability to capitalize on market demand for product at Solectrac and Energica, as market demand for these offerings continues to increase.”

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