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Truck Demand Expected To Remain Soft into 2026
Chris Fisher How things have changed. Less than a year ago the industry was gearing up for a huge 2026 class 8 truck pre-buy ahead of the phase 3 GHG emission regulations that would add significant cost to the price of a truck. Road freight was expected to rebound after the post covid freight recession, and the heavy truck replacement cycle was expected to begin. OEMs filled dealer lots in anticipation of strong demand starting in early to mid-2025 and lasting through all of 2026.
As a result of very strong freight shipments and supply chain disruptions during the Covid era, fleets were purchasing as many trucks as possible which resulted in very high truck sales from 2022 – 2024. This resulted in truck overcapacity within the market.
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EPA Plans To Drop Phase 3 Emission Regulations
Chris Fisher In July, the Trump administration proposed a draft rule rolling back the Greenhouse Gas Phase 3 rule, among the last of – if not the biggest – looming Biden-era emissions regulations facing the trucking industry.
The proposal was announced jointly with Environmental Protection Agency Administrator (EPA) Lee Zeldin’s call to revoke the Endangerment Finding that has allowed presidential administrations to regulate greenhouse gases since 2009.
The repeal of greenhouse gas regulations is a long road that includes a lengthy rulemaking process and likely numerous legal challenges.
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2025 Heavy Truck Production Expected To Decline
In 2025, Medium and heavy commercial vehicle production in South America, Greater China, South Asia and Japan/Korea is expected to increase while European and North American production is expected to decline somewhat significantly this year over 2024.
Global Index. Globally, medium and heavy commercial vehicle production is expected to decline by 1.9% this year over 2024. A moderate softening of the global economy along with negative impacts from increased tariffs has placed pressure on vehicle demand this year.
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2025 Russia Heavy Truck Sales Expected to Decline
Chris Fisher MOSCOW—(TASS) Sales of heavy trucks in Russia in 2025 may decline by 23% year-on-year to 85,000 units, Mikhail Matasov, Deputy General Director of the Russian truck producer Kamaz, told reporters. “The market will be poor in 2025. We currently estimate it at 85,000 units against 110,000 this year. We think that 85,000 is even optimistic,” he said.
Matasov noted that the decline in sales can be attributed to a decrease in demand for cargo transportation.
“If there is no construction, then there will be fewer dump trucks (needed). We also provide trucks for cargo transportation industry – if there are fewer of them, then there will be fewer haulage trucks,” he explained.
“The plan for 2025 is, in my opinion, 10,000 units. But we don’t know if there will be that many, because Chinese brands have large warehouse stocks,” Matasov added.
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Layoffs Begin in the North American Truck Segment
Chris Fisher Both Volvo and International Truck have initiated layoffs this year due to sluggish orders and high production capacity in preparation for a potential 2026 truck pre-buy ahead of the phase 3 GHG Emission Regulations scheduled for implementation in 2027.
Volvo Trucks North America plans to lay off up to another 350 workers from a Virginia plant as part of job cuts affecting up to 980 employees across the country since the beginning of the year.
Employees at the New River Valley plant in Dublin, Virginia, were notified of the workforce reduction this month, and their last day at the facility will be June 27, Volvo spokesperson Janie Coley said.
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Q1 2025 Truck Production Index (PSR-TPI) drops 5.3%
St. Paul, MN (April 21, 2025)— The Power Systems Research Truck Production Index (PSR-TPI) dropped from 113 to 107, or -5.3%, for the three-month period ending March 31, 2025, from Q4 2024. The year-over-year (Q1 2024 to Q1 2025) timeframe was flat for the PSR-TPI, 107 to 107, or 0%.
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Trump Tariffs Impact NA Truck Market
Chris Fisher It appears the two main goals for implementing US trade tariffs: to bring more manufacturing jobs to United States and to negotiate more favorable trade agreements to reduce the trade deficit with the rest of the world, could negatively impact the North American medium and heavy truck market. In 2024, the United States trade deficit was $918.4 billion which was a 17% increase from 2023.
April 9, President Trump paused his reciprocal tariffs on most countries for 90 days. The tariffs for most countries would be reduced to 10% during this period. Canada and Mexico will not be impacted by the 10% tariff for goods trading under the U.S.-Mexico-Canada Agreement. However, tariffs on imported Chinese goods were raised to 145% after the Chinese implemented retaliatory tariffs on goods exported into China from the United States.
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Transportation Freedom Act Affects Emissions
Chris Fisher A bill introduced in the U.S. Senate this month seeks to repeal heavy-duty emissions standards, eliminate new and existing emissions waivers granted to states, set a national standard for emissions and more.
The “Transportation Freedom Act,” as the legislation is known, was introduced by Sen. Bernie Moreno (R-Ohio) and co-sponsored by Sens. Tim Sheehy (R-Montana), Jim Banks (R-Indiana) and James Justice (R-West Virginia). It includes several provisions related to heavy-duty truck emissions standards, as well as provisions addressing light- and medium-duty vehicles.
Notably, the bill would repeal Phase 3 of the Environmental Protection Agency’s Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles. The Phase 3 GHG rule, finalized last year, ramps up CO2 emissions standards for trucks between model years 2027 and 2032.
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Isuzu Plans South Carolina Truck Assembly Plant
Chris Fisher Isuzu North America Corporation has announced that it is establishing a new production base in Greenville County, SC, to expand its vehicle supply capabilities in anticipation of the electrification of commercial vehicles in North America.
The company has purchased a 1,000,000 square foot facility on 200 acres of land it is converting into a state-of-the-art, Isuzu-run, assembly plant.
The size of the Greenville plant will enable Isuzu to consolidate all production-related operations under one roof. This will include KD storage and processing, parts storage, vehicle production and PIO operations. It will also allow for streamlining processes and improving efficiency, the OEM said.
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Q4 2024 Truck Production Index Climbs 3.7%
The Power Systems Research Truck Production Index (PSR-TPI) increased from 109 to 113, or 3.7%, for the three-month period ending Dec. 31, 2024, from Q3 2024.
The year-over-year (Q4 2023 to Q4 2024) decrease for the PSR-TPI was, 117 to 113, or -3.4%.
The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.
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