Dan Moyer, Senior Analyst, Commercial Vehicles, commented, “The possibility that orders are already spilling over into Q1 slots in 2027 raises the stakes on the details of changes to the EPA 2027 NOx revisions. The proposed revisions have been cleared by the White House and are expected to be published in early July. The industry’s understanding is that EPA will retain the 2027 start date and 0.035 g/hp-hr NOx limit but soften provisions related to warranty, useful life, and credit trading provisions.
“With 2026 demand exceeding build slots, an increasingly important question is EPA’s enforcement posture in the early months of the regulation. Key questions on the score are whether the proposed changes include non-conformance penalties (NCPs) and, especially, the size of those penalties and the duration of their availability if they are included. If NCPs were to cost materially less than the 2027 NOx hardware upcharge, OEMs could find it more feasible to slot excess demand into the first half of 2027.
“USMCA also adds policy uncertainty going forward. For now, USMCA remains in place, which continues to limit the effective impact of Section 232 truck and parts tariffs. However, as of July 1, any of the three countries can withdraw with six months’ notice. The risk is that prolonged uncertainty or future changes could expose more North American content to higher costs.
“Overall, June orders confirm that the Class 8 cycle remains constructive, as monthly intake continues to surprise to the upside. The bigger question now is not demand but how much of the 2026 backlog converts to production before uncertainty over EPA, tariffs, and USMCA reshapes fleet timing for 2027.”
Dan Moyer
Senior Analyst, Commercial Vehicles