To Prebuy or not to prebuy

A spate of new emissions regulations in effect this year and continuing into 2027 and beyond has many large and small fleet owners contemplating whether to rush out to buy now or wait and buy trucks featuring new, more expensive technologies that further reduce emissions and improve fuel economy.

But before making buying decisions, fleets will need to understand all the options available to them and how - or if -those options comply with stringent regulations handed down by both the Environmental Protection Agency and the California Air Resources Board.

For instance, the EPA's 2027 model year emission standards alone tighten tailpipe NOx limits to a level more than 80 percent below the current standard and reduce the particulate matter limit by 50 percent. The agency also will require that OEMs extend warranties to 450,000 miles from 100,000 and useful life limits to 650,000 miles from 435,000 miles.

Complicating fleets’ decision is the fact that complying with these new standards will mean they must choose from no fewer than 8 powertrain options -diesel, gasoline, natural gas, renewable natural gas, battery electric, hydrogen fuel cell, hydrogen ICE and hybrid. And new technologies don't come cheap: ACT Research forecasts medium- and heavy-duty vehicle costs will rise by between 12 percent and 14 percent as the EPA’s Clean Trucks regulation goes live in 2027.

Given all those realities, the issue of whether to pre buy before the new rule kicks in, hold off, or continue with regular purchasing patterns is a decision fleets will need to weigh carefully.

If the past is prologue, prebuying will ramp up later this year and throughout 2025. Trucking saw similar spikes in sales ahead of prior emissions engine changes, such as in 2006.

So far, however, Ken Vieth of ACT Research isn't seeing a spike. But it's early.

“At this point, there is no clear evidence that a prebuy has started,” Vieth says. Class 8 orders in the fourth quarter of 2023 were elevated relative to expectations, he says, but the drivers of that overperformance were the United States and Canadian vocational markets. Mexico has also been a bright spot.

“Otherwise, U.S. tractor orders were close to in line with expectations,” Vieth says. Still, even though sales have remained flat in early 2024, fleets have all of 2025 to buy, and most will wait as long as possible to get the most out of their trucks.

Does buying now mean paying later?

The positive aspects of free buying are that fleets can buy a comparatively less expensive truck under the “old” emissions standards and operate it while putting off worries about compliance for another day -a classic kicked the can down the road scenario. But, Vieth suggests, fleets need to consider what a massive prebuy might do to the bottom line.

“Prebuying implies you are buying trucks in advance of demand,” he says. “Adding capacity to the market ahead of schedule -and at the bottom of the freight cycle -will impact carrier profitability.” Veith Says since the supply-demand balance at the start of 2024 already favors shippers, adding more capacity will further slow freight rates that have been bouncing along the bottom since April 2023.

While prebuying may have drawbacks, others in the industry cite reasons to buy now.

Bruce Stockton, chief operating officer with Wilson Logistics in Springfield, MO., expects to see a prebuy wave materialize eventually. It's still a little early, he says, but it's not quite analogous to past prebuys.

“I do expect a prebuy, although different from what our industry saw in 2006,” he says. “I'd classify this prebuy as an aggressive fleet health update.”

Stockton says fleet buying in 2024 and 2025 will chill activity in 2026, with a “no-buy” stance lasting at least six months and more likely an average of 18 months. He suggests the exception will be large fleets that can afford to risk the potential downtime associated with “unknown and unproven” new technologies required to meet 2027 emission standards.

In his experience, “unknown and untested technologies always result in increased downtime as well as higher costs of the new technology,” he says.

“If fleets are financially capable of improving their average age from now until December of 2025, that's the safest practice,” Stockton says.

Another positive aspect of buying ahead of the knee regulations is that it gives others time to work out any issues with the new technology. Stockton says the new standards will inevitably result in a learning curve, and those can be disruptive.

“Those adjustment periods typically last a minimum of six months, but because we have not seen [many of] the OE’s solutions or had a chance to test them, the adjustment. Will last at least 18 months, but likely longer,” Stockton predicts.

Any OE emissions solutions will lean on lubricant supplier partners to help meet the regulations, says Tom Mueller, Shell general manager of Commercial Road Transport Lubricants.

“Work is already underway on new formulations that will build on previous categories,” he says. “We're working with our OE partners to determine how our engine oils must adapt.”

And while these changes are driven by regulations, fleets will see benefits including longer drain intervals and improved fuel economy that will boost fleets’ bottom lines, he says.

For now, when it comes to whether to prebuy, many in the industry are taking a wait-and-see approach, saying that a lot of what happens will come down to how a convergence of factors interact.

“Collaboration between OEMs, stakeholders and dealers will be essential to meet the 2027 emissions standards,” says Andrew Prosser, vice president, Truck & Equipment Leasing at Wheels, Inc., a fleet management company. “Ultimately, the potential for a disruptive prebuy of trucks before 2027 will depend on the freight market dynamics and the cost of zero-emission vehicles.”