2025 Class 8 Truck Market – June 2025
Infrastructure and Construction Support
Vocational Class 8 demand remains relatively resilient, buoyed by ongoing infrastructure activity and stable municipal funding. However, new public project starts have slowed further, reflecting tighter fiscal conditions and uncertainty around future stimulus. Construction activity is holding steady but continues to underperform earlier expectations. This has led to flat—but not expanding—vocational truck demand. In contrast, tractor demand continues to weaken, weighed down by soft freight volumes, elevated inventories, and carrier margins now at 15-year lows across much of the for-hire sector.
Production and Backlogs
Class 8 production slowed further into May, with OEMs continuing to adjust output in line with reduced order intake. Build rates fell in April, and April net orders dropped to just over 8,200 units, with May orders soft —down year-over-year. Cancellations rose again, highlighting elevated fleet hesitancy amid rising costs and an uncertain outlook. Backlogs declined to now broadly in line with seasonal norms. Q2 build slots are largely full, but Q3 capacity remains open, signaling fleet caution and delayed investment timing. The supply chain environment is mostly stable, helping manufacturers maintain production discipline and avoid inventory overhangs.
Regulatory Shifts
Regulatory planning remains in flux as EPA 2027 rule implementation faces legal and political delays. While these standards still shape long-term fleet strategy, near-term uncertainty has stalled widespread prebuying. Fleets are increasingly adopting a conservative stance, waiting for more definitive policy direction before committing capital. Combined with tariff-driven increases in truck costs—now estimated at 2–3% per unit—this has led to a material slowdown in new order activity. Most fleets are managing toward compliance through selective replacement and deferred expansion.
Capacity Rebalancing
The Class 8 sector is progressing through a slow rebalancing process. Private fleets continue to capture freight share, while for-hire carriers are curbing unproductive capacity through parked equipment and limited new investment. Equipment exits have picked up, but overall capacity still exceeds demand. Load-to-truck ratios spiked temporarily in May, driven by Roadcheck and pre-tariff import surges, but further rebalancing will be necessary for sustained market tightening. Spot rate trends in the second half of 2025 will likely hinge on the pace of continued capacity discipline and freight recovery.
Moderate Growth in Orders
Order volumes remain well below replacement levels, especially for tractors. May Class 8 net orders were only 7,500 units, among the weakest in years, reflecting broad caution across fleets. Vocational truck orders are more stable, supported by steady non-cyclical demand, but show little growth momentum. OEMs are focused on maintaining backlog health rather than ramping production. Elevated truck pricing, tighter credit, and persistent cost uncertainty are all reinforcing a cautious and selective investment approach across the market.
Economic Tailwinds and Risks
Vocational demand continues to benefit from infrastructure and municipal resilience, but macroeconomic headwinds are intensifying. Tariff-driven cost inflation, higher borrowing costs, and weak contract rates are putting pressure on fleet budgets—especially among smaller carriers. Regulatory ambiguity remains a barrier to investment, and fleet sentiment has deteriorated as public carrier net margins dropped to multi-year lows. Most carriers are delaying major capital decisions in hopes of improved rate conditions and policy clarity in the back half of the year.
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