The fall of Monarch Tractor ends with the acquisition of Caterpillar

Monarch Tractor Assets was acquired by construction giant Caterpillar, after struggling to transition into a software services business, according to a filing with the United States Patent and Trademark Office.

The acquisition, first reported by Bloomberg, caps a difficult few years for Monarch as it went through several layoffs, sued three different vendors, and lost a major contract manufacturing partner in Foxconn. It also comes just weeks after founder and wine philanthropist Carlo Mondavi said he was “fired” after disagreeing with CEO Praveen Penmetsa’s approach to software development.

Mondavi was not immediately available for comment. Penmetsa declined to comment beyond a statement Monarch issued last week, in which it said its technology had been acquired by an unnamed “major global equipment manufacturer”. Caterpillar did not immediately respond to a request for comment.

Monarch has raised more than $200 million over the past eight years. It was founded in 2018 by Mondavi, Penmetsa, and former Tesla CEO Mark Schwager. The goal was to create “driver-selectable” electric tractors that could also travel on their own in wineries, fruit farms, and dairy farms.

While Monarch initially set out to build small tractors at its Livermore, California facility, it ended up being one of four companies that partnered with Taiwanese electronics giant Foxconn to take over the former General Motors plant in Lordstown, Ohio.

Foxconn plans to build EV startups Fisker, Lordstown Motors, and IndiEV, as well as Monarch tractors. But Foxconn did make a few electric trucks for Lordstown Motors (from which it bought the factory) before that company went bankrupt. Fisker and IndiEV also went bankrupt before Foxconn could make those companies’ future cars at the factory. Foxconn made a few hundred Monarch tractors at the factory, but the electronics giant sold the plant in August 2025 to SoftBank, leaving Monarch without a manufacturer.

At that time, Monarch was already struggling. It laid off workers in early 2024 before closing a $133 million funding round. A few months later it laid off more employees and said it was restructuring to focus on software and license its proprietary technology.

Dealers who bought Monarch tractors say the company’s proprietary technology didn’t work well in the first place. One dealer who sued Monarch in September 2025 said the tractors were “defective” and “incapable of operating independently.” (Monarch has denied the claims in court.) Two other retailers have since filed similar lawsuits against Monarch. In another instance, Monarch’s former defense attorney wrote in a January filing that Monarch is making a distribution to benefit creditors — an alternative to Chapter 7 bankruptcy.

Mondavi spoke about his departure last month in a comment on his Instagram page from a farmer complaining about Monarch tractors. The winemaker wrote that he “left about a year ago due to fundamental differences in methodology” after seeing “reliability issues” with Monarch tractors on his farm, and on friends’ farms.

“I wanted to deal with them through hardware changes, while the CEO believed that it could be solved more with software. I strongly believed in a different approach but in the end I was blocked and pushed aside by another co-founder,” he wrote.

The company sold most of its remaining tractors earlier this year.