2025 Class 8 Truck Market – August 2025
Infrastructure and Construction Support
Vocational Class 8 demand remained relatively steady in July, with continued support from infrastructure spending and municipal fleet activity. However, economic headwinds—including higher equipment costs and slowing construction starts—are weighing on new order momentum. Vocational truck inventories remain elevated, reflecting a production shift that began last year, and OEMs have started pulling back on build rates to prevent further overhang. Although non-cyclical demand from sectors like utilities and government remains intact, the overall pace of growth in vocational channels remains subdued.
Production and Backlogs
Class 8 production declined sharply in July, down 20% month-over-month as OEMs adjusted output to match soft order intake. Net orders totaled 13,172 units, down year-over-year, marking the seventh consecutive month of annual declines. Tractor orders saw a slight sequential uptick—partly due to delayed planning and seasonal timing—but underlying freight fundamentals remain weak. As a result, backlogs continued to contract, falling to their lowest point since late 2016. The backlog-to-build (BL/BU) ratio rose, reflecting the slower production pace rather than rising demand.
Regulatory Shifts
Regulatory uncertainty remains a defining feature of the 2025 landscape. The EPA 2027 low-NOx regulations are now under growing scrutiny, with many fleets and industry voices speculating that a full repeal may be more likely than implementation. This has effectively paused any significant prebuy behavior and delayed longer-term equipment strategies. Meanwhile, tariffs continue to impact equipment pricing, with per-unit cost pressures still estimated in the 2–4% range. Combined, these factors are pushing more fleets to delay or minimize new vehicle commitments.
Capacity Rebalancing
The Class 8 market continues its slow path toward capacity realignment. Tractor inventories are starting to clear, particularly for pre-tariff units, but vocational stockpiles remain bloated—now accounting for over half of total Class 8 inventories. Fleet discipline is holding, and OEMs have trimmed Q3 production plans by 25% compared to Q2 levels. While equipment retirements have accelerated and sales remain just above replacement levels, excess capacity continues to linger. Any sustained recovery will depend on broader freight normalization and a more confident investment environment.
Moderate Growth in Orders
While July brought a modest month-over-month improvement in total orders, the overall pace remains sluggish. Tractor orders were up slightly year-over-year, but this reflects timing rather than any material market shift. Vocational order activity remains under pressure from high costs, sector-specific slowdowns, and regulatory uncertainty. Cancellations stayed low, suggesting that committed demand is relatively stable, but fleets are clearly in a wait-and-see mode. OEMs remain focused on backlog management and are avoiding overproduction as Q3 unfolds.
Economic Tailwinds and Risks
Public and private infrastructure spending continues to offer support to the vocational segment, but broader macroeconomic pressures are intensifying. Rising producer prices, tariff pass-throughs, and weakening labor market trends are eroding fleet profitability. Smaller and mid-sized carriers are especially exposed, with limited pricing power and constrained access to capital. Freight-generating sectors like housing and manufacturing are losing momentum, and sentiment across the for-hire sector remains negative. With Q3 off to a soft start, fleets are prioritizing cost containment and equipment efficiency over growth.
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