With the California Air Resources Board emissions mandate leading to the largest forecasted truck prebuy ever ahead of 2027, some fleet managers remain unprepared for the inventory and pricing challenges to come.
A potential inventory crisis lies ahead as California and other states sign onto the California Air Resources Board (CARB) emissions mandate, Brian Antonellis, senior vice president of fleet operations at Fleet Advantage, told Equipment Finance News.
California is adapting to the Environmental Protection Agency’s updated NOx emissions standards, which will place new emissions restrictions on heavy-duty commercial vehicles, ultimately forcing the phase-out on non-compliant vehicles. CARB’s 2027 regulations also require all heavy-duty vehicle purchases for state and local government fleets to be zero-emission vehicles.
“In our industry, they only make about 300,000 trucks a year, so if you’re going to pull forward and order more trucks in 2026 than you typically would, then they’re going to run out of availability,” Antonellis said. “We’re going to go right back into the same position we were in during COVID, where demand is extremely high, but the ability to produce trucks is stagnant, so demand exceeds supply, prices go through the roof, and we get ourselves into a very challenging market.”
Unprepared, uncertainty for CARB mandate
Twenty-three percent of fleet executives are either unaware or unsure of the CARB mandate, according to an April 29-May 10 survey of fleet executives conducted by Fleet Advantage. Meanwhile, 68% of fleet executives are aware of the likelihood of truck pre-buy activity escalating ahead of 2027, while 68% also need to replace as much as 50% of their fleet ahead of the CARB mandate.
While many fleet executives want to replace as much as half of their inventory ahead of the CARB mandate, some fleet executives remain unprepared, according to the Fleet Advantage survey. Only 36% of fleet executives have a CARB prebuy procurement plan in place, while 64% either don’t have a plan or are unsure if they have a plan, according to the survey.
Replacement cycle concerns
Fifty-seven percent of fleet executives plan to strategically procure trucks rather than overpay for new trucks when the mandate takes effect, compared to nearly 20% of fleet executives who plan to maintain their current replacement cycle, regardless of the additional CARB prebuy costs.
To navigate CARB prebuy inventory and pricing concerns, 23% of fleet executives said they will use existing trucks longer than their current replacement cycle over the next few years, according to the survey. While that replacement cycle plan makes sense on the surface, transportation equipment costs could nearly double for fleets that wait, Antonellis said.
“When you think of average age increasing on a Class 8 tractor [or truck], if they’re running 100,000 miles a year, in year five, they’re typically paying 12 cents a mile for maintenance,” he said. “When you go into year six and year seven, that can jump from 10 to 12 cents a mile, up to 20 cents a mile, so cost could double on [pre-model year 2027] existing equipment.”
Current replacement cycles
Currently, 71% of fleet executives have been operating trucks for longer than five years, according to the survey. Meanwhile, 62% of fleet executives in the April 29 – May 10 survey said as many as 50 trucks in their fleet are model year 2019 or older, up 25% since Fleet Advantage’s August survey.
For these fleets, having a plan remains crucial to avoiding serious financial concerns moving forward, Antonellis said.
“Fleet executives don’t want to get stuck with a 7-year-old fleet when they’re budgeted to run a 3-year-old fleet,” he said. “They don’t want to have their hand forced, where they’re buying somewhat unproven technology in its first year without any real-world industry testing because their performance is going to be based on whether it worked.”
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