Agriculture and construction OEM Kubota plans to create an autonomous equipment finance strategy following its partnership with Agtonomy to develop autonomous tractors.
Kubota North America has partnered with the agriculture technology company for autonomous spraying and mowing on its diesel tractors, with the goal of boosting efficiency and productivity for specialty crop growers, Kubota Chief Technology Officer Brett McMickell told Equipment Finance News. Integrating Agtonomy’s autonomy platform with Kubota’s AI-driven crop insights provides Kubota with a new product offering, but Kubota continues to explore the best method for financing autonomous equipment.
“This is another place where we’re in exploration, and I would say it’s not just Kubota,” he said. “The market itself and the people developing the technology, we’re all in a discovery on what is the right business model for all of this to settle out. It’s funny because a lot of my focus and my meetings lately have to do more on the financing side than the tech development side.”
Agriculture industry seeking solutions
Kubota joins other Ag OEMs, including John Deere, New Holland, Monarch Tractor and AGCO in trying to find ways to not only automate the industry but to find the best model for financing due to the complexity of the equipment. Kubota’s finance arm, Kubota Credit, should help the process, Mcmickell said.
“A lot of our power systems are financed through Kubota, and so this is an internal discussion we’re having as to what does financing look like,” he said. “We’re very comfortable and we know a lot about how to finance a power system. ‘How do I finance an M5 [tractor]?’ Kubota Credit is very good at figuring that out.”
Industry leaders are still exploring how to structure financing for technology investments, particularly when considering depreciation schedules and risk. Questions remain about whether these technologies will be financed separately or through models like leasing or as-a-service, McMickell said.
“From a financing perspective, there’s going to be some element of either a lease or some type of recurring charge and connection on these autonomous vehicles, just because the technology requires constant upgrade and constant maintenance, but how you formulate that is still in works,” he said. “Some of the companies have tried a monthly SaaS, but it can rub farmers the wrong way, because the utilization of the equipment isn’t on a month-to-month basis. It’s seasonal on when they use it.”
Kubota addressing growing automation market
Kubota has deployed a use-based model for its Bloomfield Robotics cameras, McMickell said. The OEM acquired Bloomfield in September 2024, as part of an effort to expand its AI and automation offerings in the agricultural space.
The agriculture automation machinery segment, which includes precision tools, robotics and autonomous vehicles, is projected to grow to $160.5 billion by 2032 from $79.7 billion in 2024, a compound annual growth rate of about 9.1%, according to global market research firm Credence Research.
As Kubota and other OEMs work out financing for autonomous equipment, one advantage of the Agtonomy partnership is having a technology partner that understands the complexities of the market, McMickell said.
“It’s refreshing to have a company that’s willing to understand there’s some uncertainty there, and willing to work through the business models as we try to figure this out together,” he said. “We’ve got a couple of ideas on how we’re going to finalize commercialization on the autonomy, but we’re still working with a customer and the dealers on what that will look like and making sure that we got a good alignment on risk and support.”
