2025 Class 8 Truck Market – April 2025
Infrastructure and Construction Support
Vocational Class 8 demand remains a relative bright spot, supported by infrastructure projects and sustained municipal spending. However, the pace of new public sector project starts has slowed amid broader fiscal tightening, and expectations for stimulus support are fading under the current administration. Construction activity remains steady but has not accelerated as previously forecast, resulting in consistent—though not growing—demand for vocational assets. Meanwhile, tractor demand continues to struggle. Softer freight volumes, elevated inventories, and weaker carrier profitability are all contributing to a cautious purchasing environment for highway tractors.
Production and Backlogs
Following strong late-2024 output, Class 8 production has decelerated. Q1 build rates have slowed meaningfully, and OEMs are actively aligning production with more conservative demand expectations. Backlogs have eased and are now more in line with typical seasonal patterns, with Q2 build slots mostly full but Q3 showing open capacity. Supply chain pressures have largely normalized, helping manufacturers avoid overbuild conditions. Still, cancellations have risen notably—highlighting fleet hesitancy in an environment of rising costs and softer freight returns.
Regulatory Shifts
The EPA’s Clean Truck and GHG-3 standards continue to influence fleet planning, but prebuy activity has not accelerated as previously expected. Regulatory timelines remain uncertain amid ongoing administrative review. Fleets are increasingly taking a "wait-and-see" approach, especially as equipment costs rise from tariff impacts. While some carriers are still preparing for future compliance, the sharp drop in Q1 Class 8 order rates suggests growing caution around major capital decisions tied to policy-driven mandates.
Capacity Rebalancing
The Class 8 market is undergoing an uneven rebalancing. Private fleets are continuing to grow their freight share, while for-hire carriers focus on trimming unproductive capacity. Equipment exits are increasing, but capacity overall remains elevated compared to freight volumes. Load-to-truck ratios spiked in early April due to short-term demand surges, but longer-term tightening will depend on further production slowdowns and improved demand recovery. Spot rate stability later in the year may hinge on whether this rebalancing continues.
Moderate Growth in Orders
Order activity for Class 8 vehicles is trending lower compared to late 2024, with Q1 order rates falling well below replacement-level SAARs. Tractor orders remain especially soft, while vocational truck activity is holding firmer. OEMs are managing production volumes carefully and prioritizing backlog stability. Higher truck prices from tariffs and more restrictive credit environments are reinforcing a more selective approach to equipment investment.
Economic Tailwinds and Risks
Underlying support from public infrastructure spending and essential services remains intact, helping vocational demand. However, macroeconomic headwinds are building. Tariff-driven input cost inflation, rising interest rates, and regulatory ambiguity are constraining fleet profitability and investment appetite. Smaller carriers and owner-operators are facing particular strain as cost pressures mount, and many are delaying replacements in hopes of improved clarity on pricing and policy later in the year.
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