The Class 8 truck market in North America has started 2025 on a downward trajectory, with both sales and net orders experiencing sharp declines. In January, retail sales fell 13% year over year to 16,175 units, representing a 28% decrease from December 2024. The trend continued in February, with net orders falling 38% on a year-over-year basis to 17,000 units, the lowest level in nearly two years when adjusted for seasonality.

While some manufacturers like International Motors and Volvo’s VLVLY Mack Trucks saw a positive momentum, reporting year-over-year sales growth in January, most major brands faced double-digit declines. Freightliner and PACCAR’s PCAR Peterbilt and Kenworth brands all saw significant drops in sales. PCAR’s Peterbilt’s sales fell nearly 30%, while Kenworth experienced a 25.2% decline in January.

The slowdown is primarily due to economic and political uncertainty, which has led businesses to delay major investments. After a strong end to 2024, concerns over trade policies, tariffs and the broader macroeconomic environment have impacted industry planning. Freight demand has also weakened, leading fleets to delay vehicle replacements and scale back expansion plans. 

Furthermore, the upcoming EPA 2027 emissions regulations are also expected to complicate purchasing decisions. Fleets are now weighing on whether to buy trucks now to avoid future cost increases or wait for more clarity on pricing and compliance requirements. These factors, along with inflationary pressures and volatile interest rates, have created a challenging environment for truck manufacturers and suppliers. 

Tariffs & Trade Policy Uncertainty

One of the biggest threats to Class 8 truck sales is the potential impact of new tariffs on trucks and components. Approximately 45% of Class 8 trucks produced for the United States and Canadian markets will be affected by the Trump administration’s 25% tariffs on imports from Canada and Mexico, as well as the potential Canadian countermeasures. This is particularly concerning because as many as 40% of United States’ Class 8 trucks are built in Mexico and 65% of Canada’s Class 8 trucks are assembled in the United States. 

Daimler Truck, which builds Freightliner and Western Star trucks in both the United States and Mexico, is expected to be significantly impacted by the tariffs, leading to higher costs for its North American customers.

Furthermore, tariffs on steel, aluminum and other parts from China can drive up manufacturing costs even more, which will be inevitably passed on to the buyers. The higher costs can discourage fleets from purchasing new trucks and lead to longer replacement cycles, putting downward pressure on demand.

This uncertainty about economic policies and growth has thus led businesses to take a wait-and-see approach, delaying their capital expenditures.

The Impact of EPA 2027 Emissions Regulations

The EPA’s 2027 NOx regulations are expected to further increase the cost of Class 8 trucks, as manufacturers will have to invest in new emissions technologies to meet the compliance standards. 

Cummins CMI, a leading supplier of diesel and natural gas engines, will be directly affected by these regulations. As a major supplier to Daimler and PCAR, Cummins will need to implement costly emissions-compliant technologies for engines while also considering shifts toward better alternatives.

Conclusion

The Class 8 truck market is hence in a period of transition, facing economic uncertainty, regulatory challenges and evolving trade policies. While some fleets are rushing to purchase trucks before costs rise, others are delaying investments due to the uncertainty. Class 8 truck manufacturers, as well as engine suppliers, are navigating a challenging environment. In the near term, sales and orders are expected to remain weak. Pre-buying ahead of the EPA 2027 regulations could provide a temporary boost in 2026, but the overall outlook remains dull. As newer regulations and trade policies take effect, the industry’s ability to adapt will play a crucial role in shaping the future of Class 8 trucks.

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