New EPA Standards to Potentially Drive Largest Prebuy Ever: ACT

‘The Higher the Cost, The Bigger the Prebuy,’ is the tile of ACT’s North American commercial vehicle and transportation prebuy analysis, which anticipates the largest prebuy of trucks is on the horizon.

The report analyzes the new US Environmental Protection Agency (EPA) Notice of Proposed Rulemaking (NPRM) for Heavy-Duty Engine and Vehicle Standards and its likely impact on the US truck manufacturing and freight transportation industries. Key findings indicate the new standards will likely result in the largest prebuy ever.

The report builds upon a number of earlier studies of commercial vehicle prebuying behavior, and presents and compares three scenarios based on different potential costs. This robust, 32-page analysis covers these three model outputs and analysis of prebuys due to the proposed regulations; the labor and emissions impact; prebuy/lowbuy model methodology, including tractor prebuy estimates, HHD tractor cost analysis, lowbuy effects, trucking industry sizing and freight rate impact, vocational prebuy model outputs, and MHD prebuy model outputs. Supporting analysis includes dealer prebuying, ability to buy considerations, secondary market effects, and a history on the hidden prebuy of 2002; estimation using regression analysis; and the uncertainties and future implications. ACT, just like those who manufacture and operate commercial vehicles, are pro clean air. This analysis examines the market shifting consequences of the very expensive solutions needed to tackle a very important problem.

According to Tim Denoyer, Vice President & Senior Analyst at ACT Research, “The coming prebuys will have large effects on commercial vehicle volumes and industry employment, which will have to be ramped to fulfill demand, only to be followed by significant job cuts and industry financial performance. Prebuying adds surplus capacity, which will weigh on freight rates in 2026 and 2027, perhaps materially impacting the trucking industry’s financial performance for a couple of years. From a long-term perspective, the cost of equipment is a rising barrier to entry that should support industry health and development of clean technologies.”

Denoyer continued, “The significant costs analyzed in this report are needed as the commercial transportation industry takes more responsibility for its role in climate change, and this analysis examines the market consequences of the new rules, filling in some key blanks left in EPA analysis.”

In describing ACT’s prebuy modeling methodology, Kenny Vieth, President & Senior Analyst at ACT Research, says it’s straightforward: “How much is it going to cost to operate? Are those costs mitigated by improved operating characteristics? And, does the trucking industry have the wherewithal to do something about it? If the answer to the first question is “biggest ever” and the answer to the second is “no mitigation,” the conditions are in place to warrant a major prebuy.” He adds, “The final resolution of prebuy size will be determined by where the economy is in 2025-2026, and based on our analysis, the ability of commercial vehicle supply chains to meet what we foresee as record demand ahead of the prebuy.”

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