John Deere is sizing the addressable market from its technology offerings to be an incremental $150 billion.
Company leaders outlined Deere’s vision for autonomous farming at its Leaps Unlocked technology event last week.
To accelerate adoption of autonomy, Deere plans to include autonomous sensors in the base configuration of the 8R tractor in the next few years — with the goal of having an autonomy kit on every large tractor that ships.
The technology Deere is using to power its autonomous 8R tractor will eventually be deployed to the entire fleet doing other jobs, according to Igino Cafiero, CEO of Bear Flag Robotics, the autonomous driving technology startup acquired by Deere.
Cafiero says by 2030, Deere plans to have an autonomous system that can do spring tillage, planting, spraying, harvest and fall tillage in corn and soybeans.
Deere’s technologies paired with the large fleet of Deere machines in use worldwide gives the company the advantage of scale.
“With these 3 technologies — cameras, edge computing, machine learning — as well as the scale of our fleet, we’re able to develop new robotics and artificial intelligence products much faster than anyone in the industry, and this sets us up to unlock the $150 billion of incremental addressable market. Building on our 180-year-old roots as a world-class manufacturer, we are now set up to become a world-leading robotics and artificial intelligence company.”
The addressable market includes potential savings on herbicides and fertilizers, improved yields and fewer labor expenses.
Analysts at investment firm Stifel say capturing a portion of these markets is a key driver behind Deere’s target of 20% equipment operations margins by 2030.
The analysts write: “DE expects these technologies to ultimately help increase revenue from less-cyclical recurring revenue from technology solutions priced on a per-acre basis as well as additional aftermarket opportunities. DE sees potential for these less-cyclical revenue to reach ~40% of total over time and account for an even greater portion of overall earnings.”