2025: A Reset Year for North American Commercial Vehicle Production Forecasts

2025 marked an inflection point for the North American commercial vehicle industry. Instead of a steady post-pandemic recovery, the year unfolded as one of recalibration amid regulatory uncertainty, geopolitical shifts, original equipment manufacturer (OEM) restructuring and a move toward pragmatic powertrain strategies.

In this blog, we unpack how and why key defining regulatory, industry and powertrain developments reshaped North America’s commercial vehicle outlook.

Regulatory Landscape: Policy Volatility and Deferred Commercial Vehicle Demand Trump Tariffs and EV Policy Reversal

The protectionist trade measures introduced in 2025 by the Trump administration increased acquisition costs for fleets, particularly those dependent on cross-border supply chains. This put pressure on OEM margins and prompted manufacturers to decrease near-term production at non-US plants.

At the same time, the softening of federal electric vehicle (EV) policy, including the rollback of EV tax credits, created uncertainty around incentives and slowed the adoption of electric commercial vehicles, especially in the medium- and heavy-duty segments. OEMs responded by scaling back EV production volumes, delaying capacity expansions and pivoting toward flexible, multi-powertrain strategies.

Delayed Heavy-Duty Truck Demand

Heavy-duty truck demand was expected to rise ahead of new heavy-duty emissions standards set to take effect in 2027, but the Environmental Protection Agency decided to overturn the 2027 standards. This eliminated the economic incentive to pre-buy heavy-duty trucks ahead of 2027. Instead, fleets deferred purchases, OEMs revised near-term heavy-duty commercial vehicle demand outlooks and regulatory uncertainty added volatility to production planning.

Industry: Commercial Vehicle Production Reshoring, Consolidation and Strategic Realignment

OEM Investments in US-Based Commercial Vehicle Manufacturing

OEMs accelerated investments to localize manufacturing in the United States:

• Isuzu Motors: Invested $280 million in a South Carolina plant, which will become operational by 2027 and have a flexible ICE–EV capacity of 50,000 units annually by 2030.
• Hyundai Motor Group: Committed $21 billion between 2025 and 2028 to expand US vehicle production and strengthen parts localization, logistics, steel operations and future technologies.
• General Motors: Announced $4 billion in investment over two years to reshore production and expand US ICE and EV capacity to more than two million units annually. The investment will support the production of full-size SUVs, light-duty pickup trucks and a mix of ICE and electric vehicles, reinforcing GM’s domestic manufacturing footprint and model portfolio.
• Stellantis: Announced plans to shift Jeep Compass production from Canada to Illinois, reinforcing a US-centric manufacturing footprint.

GM BrightDrop Exit

General Motors discontinued production of the BrightDrop electric delivery vans at its CAMI Assembly plant in Ontario and confirmed the program will not be transferred to another facility, reflecting softer demand, regulatory changes and the withdrawal of key US tax incentives.

Newcomer Pickups: Slate and Scout

Slate Auto and Scout Motors emerged at opposite ends of the pickup value spectrum. While their near-term volume impact remains limited, their entry prompted legacy OEMs to reassess competition in light commercial vehicle and lifestyle pickups, influencing medium-term capacity planning.

Bollinger Motors Closure

The shutdown of Bollinger Motors highlighted capital and execution challenges in the electric commercial vehicle space, dampening expectations for startup-led volume growth and reinforcing market reliance on established OEMs.

FedEx Backing of Harbinger

FedEx’s investment in Harbinger validated purpose-built electric medium-duty commercial vehicle platforms, supporting its production road map and demonstrating that fleet-backed startups with defined use cases can selectively influence future volumes.

Workhorse–Motiv Merger

The Workhorse–Motiv merger reflected accelerating market consolidation, combining commercial vehicle manufacturing ambitions with fleet expertise to improve scale economics and production viability.

Mack Trucks’ Launch of Mack Pioneer Production in Pennsylvania

Mack Trucks’ launch of the Mack Pioneer at its Lehigh Valley facility reinforced its US manufacturing commitment and supported heavy-duty commercial vehicle production outlooks.

International’s Continuation of Autonomous Commercial Vehicle Testing

International continued US autonomous truck testing despite delayed commercialization, keeping autonomous-ready commercial vehicle platforms relevant for long-term, hub-to-hub freight forecasts.

Powertrain Shifts: Market-Driven Pragmatism Over Idealism

Hydrogen Autonomous Trucks—Hyundai XCIENT Fuel Cell

Hyundai’s continued deployment and testing of XCIENT fuel cell trucks, including autonomous use cases, kept hydrogen powertrains on strategic road maps. 2025 reaffirmed hydrogen as a long-term opportunity, with cost pressures and infrastructure constraints pushing meaningful deployment volumes into the next decade.

Harbinger Funding for Medium-Duty EVs

Harbinger’s $100 million Series B funding in January 2025 supported medium-duty electric truck production for fleet applications such as last-mile and regional haul. This led to modest upward forecast revisions, though still below long-term, medium-duty EV growth levels forecasted in Q1 2025.

Hydrogen Powertrain Development Delayed While Natural Gas Thrives

As hydrogen powertrain development timelines slipped, progress was constrained by the underdeveloped refueling infrastructure, particularly for heavy-duty and long-haul operations, which eroded fleet confidence and limited operational feasibility. Additionally, the persistently high cost of green hydrogen continued to weaken the total cost of ownership value proposition. In contrast, natural gas powertrains gained momentum as a more cost-effective and regulation-compliant alternative.

According to Escalent’s Commercial Vehicle Competitive Landscape Q3 2025 North American Powertrain Build Plan, hydrogen fuel-type share is expected to reach 0.08% in 2030 compared with 0.05% in 2024. However, natural gas is anticipated to gain further traction, with its share rising from 1.45% in 2024 to 2.11% in 2030. Growing fleet interest in renewable natural gas reinforced OEM commitments to sustain or expand natural gas offerings.

Three Key Takeaways for OEMs, Suppliers and Body Manufacturers

2025 proved to be less a year of disruption and more one of recalibration for the North American commercial vehicle industry. Regulatory volatility softened near-term demand pressures and enabled more streamlined production planning. OEMs doubled down on US manufacturing, startups faced consolidation pressures and powertrain strategies pivoted toward market-driven choices.

Over the next three years, here are three key takeaways for OEMs, suppliers and body manufacturers:

1. US localization is no longer optional—it’s a margin protection strategy. Ongoing uncertainty around trade policy and the upcoming 2026 United States–Mexico–Canada Agreement review make it critical for stakeholders to focus on US localization, meet rules-of-origin requirements and build strong regional supply chains to protect margins and maintain tariff-free access. As a result, OEMs are likely to maximize their spare US production capacity to increase US-based output in the short term, thereby reducing their dependence on Canada, Mexico and other countries.
2. Reshoring production will constrain capital for innovation across the value chain. Over time, increasing US output will require significant investments in new and expanded plants. This will reduce OEMs’ ability to fund new products and technology developments—creating downstream implications for suppliers and body manufacturers competing for capital and program alignment.
3. Electrification timelines are stretching, elevating the role of alternative powertrains. OEMs, suppliers and body manufacturers will need to recalibrate their product plans to reflect slower electrification adoption. In the near term, OEMs should prioritize alternative powertrains such as hybrids and natural gas, as well as align products and supply chains around flexible, multi-fuel platforms that can adapt to evolving regulations, infrastructure and fleet economics.

In sum, rather than derailing the long-term transition to electric powertrains, 2025 reset expectations—realigning commercial vehicle production forecasts with economic realities, infrastructure readiness and fleet priorities. This sets the stage for a more measured, resilient commercial vehicle market growth trajectory heading into 2026.

If you’d like to learn more about Escalent’s Commercial Vehicle Competitive Landscape offering or how our commercial vehicle and fleet industry experts can help you plan smarter and stay ahead by anticipating the changing powertrain and regulatory landscape, please fill out the form.

 

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