Dive Brief:
- Paccar executives expect the U.S. Environmental Protection Agency’s recent proposal to ease implementation of stricter nitrous oxide emissions standards to support a stronger truck market in 2027, according to the company’s July 28 earnings call.
- Fleets will have the option to continue to purchase current-generation engines and pay a nonconformance fee while manufacturers validate the new engine technology, company executives said.
- “I think it bodes well for a good 2027 operating condition for the customers and for us,” CEO Preston Feight said during the call.
Dive Insight:
Many manufacturers had expected fleets to rush to make purchases ahead of stricter emission standards. Instead, Paccar executives said the EPA’s proposal should smooth that replacement cycle and create a stronger position for the industry in 2027.
“I think that what we kind of expect now is with the smart positioning that the EPA did, it will be just a continued improved cycle through the balance of the year with a stronger 2027 and not much drop-off,” Feight said.
The company expects the U.S. and Canada’s Class 8 market to total about 250,000 trucks this year, with retail sales increasing from 105,000 units in the first half to roughly 145,000 during the remainder of 2026 as freight conditions improve.
During the freight downturn, many fleets postponed replacing equipment and conserved capital, Feight said. As rates recover and carrier profitability improves, Paccar’s customers are beginning to return to more typical replacement cycles and invest in newer, more fuel efficient trucks.
“Since they’re just starting to do that, it seems like it’s going to ramp through the second half … And then I think we should expect a very healthy market in ‘27,” Feight said.
Paccar’s own production outlook has reflected that optimism. The OEM increased build rates earlier this year and expects to sell out of its remaining production slots within the next month or two, Feight added, with some orders carrying into 2027.
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