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Clean Fleets Target Business Cases as Subsidies Fade
Regulatory Reversals Shift Focus From Electrification to Other Powertrain Options While AI, Autonomy Gain Momentum at ACT Expo
Key Takeaways:
- ACT Expo 2026 highlighted a shift from regulation-driven electric truck deployment to a measured, diversified sustainability approach as emission rules and incentives were rolled back.
- With federal incentives gone and diesel prices rising amid the Iran war, fleets are prioritizing business cases, boosting interest in natural gas and renewable fuels.
- Fleets are expected to diversify drivetrains and demand technologies prove value on their own, while autonomy, connectivity and AI advance toward early commercialization.
LAS VEGAS — The rollback of emission regulations, rapid advances in technology and persistently volatile business conditions are reshaping the commercial vehicle market, compelling truck makers, fleet operators and industry suppliers to adapt to this new reality.
Speakers and exhibitors at ACT Expo 2026 signaled momentum shifts in the clean transportation movement and growing acceptance of connected vehicle technology, artificial intelligence and autonomous driving.
The regulation-driven urgency to test and deploy battery-electric trucks that characterized this event just two years ago has given way to a more measured and diversified approach to fleet sustainability.
The elimination of federal greenhouse gas emission rules, the reversal of electric vehicle mandates at the national and state levels, the expiration of federal tax credits for zero-emission trucks and funding cuts for clean transportation initiatives have changed the calculus for fleets as they assess alternatives to diesel.
While truck makers and some early adopters continue to invest in zero-emission vehicles, deployments will need to stand on viable business cases rather than government incentives moving forward.
John Smith, the incoming president and CEO of less-than-truckload carrier FedEx Freight, encapsulated the balance between sustainability and operational demands in ACT Expo’s opening keynote May 4.
“I want to start with a hard truth that often gets lost in the excitement of going green. Sustainability is only sustainable if it makes business sense,” Smith said. “You can only make a difference if you stay in business.”
FedEx Freight is less than a month away from its planned spinoff from FedEx Corp., which ranks No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
From autonomous trucks to alternative fuels, there’s a wide range of commercial vehicle technologies on the show floor at @ACTExpo 2026. Here are a few highlights. #ACTExpo pic.twitter.com/wEisl21cIZ — Seth Clevenger (@SethClevenger) May 5, 2026
In this new regulatory environment, electric trucks are increasingly sharing the limelight with alternative fuels such as renewable diesel, biodiesel, and compressed and renewable natural gas, along with cleaner versions of the conventional diesel engines that continue to dominate the trucking industry.
Heavy-duty trucks powered by natural gas engines were a common sight at ACT Expo this year, including multiple vehicles equipped with the 15-liter Cummins X15N engine.
In the weeks leading up to the show, surging diesel prices amid the U.S. war with Iran have been making alternative fuels more financially attractive for fleet operators.
On the whole, demand for new commercial vehicles has remained subdued in recent years as fleet operators have weathered a prolonged freight market recession along with rising operating costs and tariff-driven disruptions and uncertainty.
Erik Neandross, president of ACT Expo organizer TRC Clean Transportation Solutions, noted that the “tremendous tailwinds” for clean transportation in recent years have “shifted dramatically” in the past 12 to 15 months.
However, he suggested that the rollback of government incentives and regulations that had been pushing the industry to adopt cleaner vehicles could actually help the market sharpen its discipline and deliver better value to customers.
“Ultimately the technology needs to prove itself and stand on its own,” Neandross said.
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TRC’s Erik Neandross outlines the state of sustainable fleet technologies at ACT Expo 2026. (Seth Clevenger/Transport Topics)
Connected and Autonomous Trucks
Apart from ACT Expo’s core focus on fleet sustainability, the annual showcase of commercial vehicle technologies placed a heavier emphasis this year on digitization, software and connectivity in the commercial vehicle space.
“Today’s trucks are more than just gears and lever, horsepower and torque. They are also rolling computers, ushering in a more advanced commercial future,” Stephen Roy, president of Mack Trucks and chairman of Volvo Group North America, said in a May 5 speech to ACT Expo attendees. “In short, today’s trucks are intelligence on wheels.”
Much of the technology-related discourse at ACT Expo focused on the rise of artificial intelligence and advances in autonomous trucks, which are beginning to move beyond pilot projects toward early commercialization.
ACT Expo featured more than half a dozen self-driving Class 8 tractors from multiple truck manufacturers equipped with autonomous driving technology from a variety of developers, including Aurora, Torc Robotics, PlusAI, Waabi, Kodiak and Stack AV.
Peterbilt Motors Co., for one, exhibited an autonomous-ready Model 579 outfitted with Stack AV’s autonomous driving system.
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Peterbilt showcases a Model 579 tractor outfitted with Stack AV’s autonomous driving technology. (Seth Clevenger/Transport Topics)
Drivetrain Diversification
Although federal agencies rolled back funding support for clean commercial vehicles and infrastructure, more than $5 billion in estimated annual funding from state, local and utility programs remains in place through at least 2028, according to the annual State of Sustainable Fleets market brief prepared by TRC and released in conjunction with ACT Expo.
Nate Springer, TRC’s vice president of market development, said fleets are doubling down on operational efficiency while diversifying their drivetrain mix.
“Rather than retrenchment, we are seeing interest and growth in use by fleets across a portfolio of solutions so they can deploy each where it works best,” Springer said.
Industry uptake on renewable diesel and biodiesel increased last year and has become more appealing with conventional diesel prices surpassing $5 per gallon since the Iran war began, he added.
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Optimus Technologies’ Vector fuel system enables trucks to run on up to 100% biodiesel. (Seth Clevenger/Transport Topics)
Meanwhile, the natural gas truck market has benefited from the first full year of availability of the 15-liter Cummins X15N natural gas engine, which entered full production in late 2024 and is now available in Freightliner, Kenworth and Peterbilt models.
Earlier this year, Cummins reported that 1,000 units of the engine were already in customer hands or in production.
Among the fleets operating the X15N surveyed for TRC’s report, 71% said they achieved cost savings with the natural gas engine compared with diesel — “and that was before the Iran war,” Springer said.
At the same time, access to renewable natural gas continues to expand. RNG is replacing a significant share of compressed natural gas used in natural gas trucks, particularly in California, where RNG accounted for 97% of natural gas fueling in 2025.
Zero-Emission Trucks
Federal tax credits for new zero-emission commercial vehicles expired in late 2025, which has increased the cost premium of electric trucks compared with diesel models.
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Electric vehicle adoption in the transportation industry remains closely tied to applications and vehicle types that are best suited to the technology, such as delivery vans.
Terminal operations are another promising business case for battery-electric vehicles, Springer said.
“The yard tractor market is proving a best-fit application for EVs, with data emerging that battery-electric yard tractors cut maintenance costs as much as 75% while also cutting fuel costs and improving utilization and uptime,” he said.
Springer noted that electric Class 8 tractor deliveries have not yet exceeded 1,000 units in any given year but predicted that this nascent segment of the commercial vehicle market could surpass that level in 2026 or 2027.
Meanwhile, the emerging hydrogen-powered vehicle sector faced “its most challenging year” in 2025, he said.
Nikola Corp. and Hyzon Motors — two prominent manufacturers of Class 8 fuel cell electric trucks — both exited the market, while the cancellation of much of the funding for Department of Energy hydrogen hubs removed a key development resource.
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However, hydrogen fuel cell modules remain part of the product development programs at major manufacturers and suppliers, such as Daimler and Volvo’s Cellcentric joint venture, Toyota, Hyundai, Cummins and Honda.
Despite the dramatic changes to the regulatory and business environment, many fleets continue to test and deploy various clean fleet technologies and alternative fuels in applications where each works best.
“To put it succinctly, most of these technologies have shown where they stand on their own, and for fleets, advanced clean technologies have moved from sustainability strategy to business strategy,” Springer said.
