Replacement demand drives Cummins HD truck guidance hike

Order activity persuaded Cummins to raise its full-year industrywide North American heavy-duty truck forecast and revenue guidance for the engine division. (jetcityimage/Getty Images)

Replacement demand funded by the ongoing freight market rebound will continue to be the key factor in driving North America heavy-duty truck demand in the back half of the year, engine maker Cummins’ top executive said.

Carriers’ on-highway truck appetite has and will continue to outweigh the impact of emissions regulations, with Cummins boosting its 2026 regional demand forecast as a result, Jennifer Rumsey said during Cummins’ second-quarter 2026 earnings call Aug. 4.

“A lot of what we see right now is that underlying demand and replacement are improving. There is some pre-buy happening certainly, but the fundamentals have improved and that’s driving underlying demand up,” said Rumsey.

“The uncertainty that existed really until last month around regulations and all of the details that were associated with that has caused people to be cautious around the pre-buy,” she added.

Order activity persuaded Cummins to raise its full-year industrywide North American heavy-duty truck forecast and revenue guidance for the engine division, the company said, while noting that truck makers were unlikely to raise their production levels.

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 Rumsey

The company’s North American heavy-duty truck demand forecast is now 240,000 to 250,000 units, compared with prior guidance of 230,000 to 250,000 units.

Cummins’ North American medium-duty truck market forecast is now 130,000 to 140,000 units in 2026, meanwhile, compared with prior guides of 125,000 to 135,000 units.

In addition to the boost to Cummins’ demand guidance, the Columbus, Ind.-based company said full-year revenue for its engine business would rise 9%-14% year on year, compared with previous guidance in a 7%-12% increase range.

Cummins put industrywide production of heavy-duty trucks in Q2 at 60,000 units, down 4% year over year, while the company’s heavy-duty truck engine sales totaled 23,000, up 2% year over year.

The company said industrywide production of medium-duty trucks was 32,000 units in Q2, an increase of 8% from 2025 levels, while Cummins’ engine sales in the market segment totaled 29,000, up 19% year over year.

Globally, Cummins sold 30,100 heavy-duty engines in Q2, a 1.7% increase compared with 29,600 in the year-ago period. Medium-duty sales jumped 17.3% year over year to 86,100 engines in the most recent quarter from 73,400 a year earlier.

Cummins’ engine unit saw a 6% increase in sales in Q2 to $3.08 billion from $2.9 billion a year earlier. The division’s North American revenue rose 1%, while international sales jumped 23% on stronger Chinese construction demand.

Cummins posted revenue of $9.46 billion in Q2, an increase of 9.4% compared with $8.64 billion in the year-ago period.

Profits at Cummins in the most recent quarter rose 4.7% to $932 million from $890 million in the same period 12 months earlier.

The company raised its full-year revenue guidance to an increase of 10%-13% from one of 8%-11%, citing improved demand in the North American on-highway market and in China.

Looking further forward, analysts were keen to hear executives’ take on how the recently issued Environmental Protection Agency draft regulations for nitrogen oxide emissions and the staggered rollout of model-year 2027 engines that adhere to stricter tailpipe standards would impact demand.

Rumsey and Chief Financial Officer Mark Smith said there would be some impact, but it would be muted.

“The key thing is the destination doesn’t change. The growth opportunity that will exist for us in engines and components with these new platform launches remains the same, and we think the transition will be smoother,” said Rumsey.

“While we would expect some moderation in demand next year, and we won’t give specific guidance, of course, today on what that is. It will not be as abrupt as we might have previously anticipated as we continue to offer the current product for part of next year …. and then ramp up the new product,” she added.

Smith noted that the benefit of a staggered transition is that Cummins and fellow engine makers are able to trial their products for a longer period.

Cummins plans to stagger the introduction of model-year 2027 X15 and X10 engines that meet the tighter emissions standards and keep producing the existing versions, the company said July 9 after reviewing the draft EPA regulations.

Limited production of the X15 engine will begin in January 2027 and then ramp steadily, Cummins said, with full production expected to begin in the fourth quarter of 2027.

Similarly, the company plans to begin limited production of the 2027 X10 engine in January, with full production expected by the third quarter, subject to truck makers’ launch plans.

During the transition, the current X12 and L9 engines used in truck and transit bus applications will remain available.

Rumsey attended the unveiling of the draft regulations on the National Mall on July 9. The proposal kept a Biden-era requirement that NOx emissions for heavy-duty trucks fall to 35 milligrams per horsepower-hour from 200 mg/hp-hr, but manufacturers were offered wiggle room on implementation, noncompliance and NOx credits.