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Strait of Hormuz Closure May Tip Global Economy
Chris Fisher Americans are warily eyeing prices at the pump as oil shipments through the Strait of Hormuz grind to a halt amid the threat of Iranian attacks on vessels. The IEA took the unprecedented step of saying it would release 400 million barrels of oil from reserve on Wednesday. But oil is far from the only product for which the world economy is heavily dependent on the shallow, narrow waterway which connects Persian Gulf ports with the rest of the world. From the metals market to agriculture and autos, a de facto closure of the strait would ripple through business sectors and both the U.S. and world economy.
Aluminum is a good example. It is one of the biggest non-petroleum commerce casualties of the U.S.-Iran war. In 2025, the Middle East accounted for roughly 21% of unwrought aluminum imports and 13% of wrought aluminum imports — and those percentages have been rising. Unwrought aluminum is the raw, unprocessed metal in forms like ingots and billets, while wrought aluminum has been mechanically shaped into sheets, rods, or other finished forms used directly in manufacturing.
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Tesla Semi Lines Up for $165M in California Incentives
Chris Fisher The update was initially reported by The Los Angeles Times.
Tesla reportedly is positioned to receive roughly $165 million in California clean-truck incentives for its Semi.
As per the Times, the Tesla Semi’s funding will come from California’s Hybrid and Zero-Emission Truck and Bus Incentive Project (HVIP), which was designed to accelerate the adoption of cleaner medium- and heavy-duty vehicles. Since its launch in 2009, the HVIP has distributed more than $1.6 billion to support zero-emission trucks and buses across the state.
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2026 Growth of 4.9% Seen in Truck Production
Chris Fisher Medium and heavy truck production in North America is expected to increase by 4.9% this year compared with 2025. While class 8 truck production is expected to increase by 6.1% this year, the industry continues to be negatively impacted by the weight of the tariffs, low freight demand, excess truck capacity and relatively high finance rates which is expected to continue through at least the first half of the year.
With regard to the implementation of the phase 3 GHG emission regulations, it will be later in the spring before the EPA finalizes any revisions to the standards. Many in the industry believe the EPA will retain the 0.035 g/hp-hr standard along with the 2027 implementation date but cancel the extended warranty requirements which would have added significant up-front cost to the trucks.
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EPA Won’t Delay 2027 NOx Rule, Plans Changes
Chris Fisher The U.S. Environmental Protection Agency is moving forward with the 2027 timeline for its heavy-duty NOx rule—currently set to take effect with the 2027 model year—but says changes are in store.
The American Trucking Associations (ATA), National Tank Truck Carriers, Truckload Carriers Association, and 49 state trucking associations in August penned a letter to EPA, asking the regulator to push implementation to 2031, citing “substantial compliance costs and operational burdens at a time when the trucking industry is already contending with historically difficult market conditions.”
Administrator Lee Zeldin in March announced that the EPA was reevaluating the Biden-era 2022 Heavy-Duty Engine and Vehicle rule that regulates oxides of nitrogen (NOx) and other emissions beginning with Model Year 2027.
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Trucking Recovery To Be Driven by Supply Side?
Chris Fisher The signs of a freight recovery that appeared early this year are gone, replaced by a tough market where recovery will have to come from a supply-side correction, American Trucking Associations’ Chief Economist Bob Costello said at ATA’s 2025 Management Conference & Exhibition in San Diego.
Costello delivered a blunt and sobering economic warning: new tariffs, persistent stagflation, and a slowing labor market have created “absolutely unsustainable” conditions for many carriers, and the only way out, at least near-term, is to erase capacity from the highway.
“It’s not easy to talk about because it’s people’s livelihoods, but it’s a necessary evil,” Costello said, noting that freight demand is unlikely to improve anytime soon. “This has got to be a supply-driven change in the market.”
The current 18% effective tariff rate, nearly six times higher than it was during the first Trump administration, is a level not seen since the 1930s. Costello warned that the industry is only in the “bottom of the second or top of the third inning” of feeling the impact. “Any benefits of putting tariffs on foreign goods… are years in the future, but the cost hits much quicker,” he said.
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Jack Prince Joins Power Systems Research
Jack Prince Jack Prince has joined Power Systems Research as a business development manager. He’ll be working out of the Ann Arbor, MI, office. Jack brings over 25 years of business development and commercialization experience to the global automotive and mobility industries. He uses research and data to help clients identify market opportunities and improve business efficiency while enhancing product performance.
Jack has advised emerging ventures on market discovery, product strategy, and investor…
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2025 North America Combine Production
DATAPOINT
4,600 units is the estimate by Power Systems Research of the number of Combines expected to be produced in North America during 2025.
A Combine is a farm machine that harvests grain crops. Combines can reap, thresh and winnow crops into a single process. Crops include wheat, oats, rye, barley, corn, etc.
This product information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™, which provides information…
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2025 North America Scooter Production
DATAPOINT
481,000 units is the estimate by Power Systems Research of the number of Scooters expected to be produced in North America during 2025.
Scooters/Minibikes/Mopeds are motorized 2-wheeled vehicles used primarily for recreational.
This product information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™, which provides information on engines, and OE Link™, a database of equipment manufacturers. …
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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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