STRONG VOCATIONAL TRUCK DEMAND AND FLEET REPLENISHMENT
Despite economic headwinds, demand for heavy-duty trucks remains solid. In December 2024, ACT Research reported that Class 8 net orders in North America totaled 36,800 units, reflecting strong tractor demand. Large fleets, despite profit challenges, are replenishing aging equipment in anticipation of stricter emissions regulations in 2027. Private fleets, with stronger budgets, have been leading
these purchases to mitigate future price hikes associated with EPA’s Clean Truck regulations.

Vocational trucks are also performing well, with orders reaching 8,100 units in December 2024. ACT Research projects that 2025 will be the best year for vocational truck demand since 2006, supported by government infrastructure investments and industrial expansion. However, medium-duty truck demand has weakened, with Classes 5-7 orders falling 40% year-over-year to 16,800 units, as high inventory levels and stagnant sales slow purchasing activity.

FREIGHT WEAKNESS AND TONNAGE DECLINES POSE CHALLENGES
While truck orders remain strong in certain segments, overall freight volumes are under pressure. The ATA Truck Tonnage Index declined for two consecutive months at the end of 2024, falling 1.8% in November and another 1.1% in December, bringing tonnage to its lowest level since January 2024. Factory output sluggishness and fleet expansion by private carriers have reduced available freight for for-hire carriers, dampening overall trucking activity.

REGULATORY AND SUSTAINABILITY CONSIDERATIONS
The regulatory landscape for emissions standards faces uncertainty under the Trump administration, which wants to roll back EPA regulations, including the Clean Truck rules and state-level emissions mandates. Despite this, many fleet operators have already begun investing in zero-emission trucks, anticipating long-term shifts in the industry and seeking to secure financing before potential cost increases associated with regulatory compliance.

If the administration successfully weakens or repeals emissions mandates, the urgency to adopt electric and hydrogen-powered trucks could diminish, slowing the demand for alternative fuel vehicle financing. Additionally, challenges such as high upfront costs and limited infrastructure for zero-emission vehicles remain barriers to widespread adoption. Equipment finance providers will need to closely monitor regulatory developments and adjust their strategies accordingly, balancing sustainability investments with the potential for policy reversals. •