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As regulations fade, electric truck adoption will hinge on business cases
Industry participants cite cost, route suitability and customer demands in fleet decisions
The most attractive opportunities generally involve smaller batteries, shorter routes, lower speeds and less expensive charging infrastructure. (Transport Topics)
Key Takeaways:
- Electric truck adoption is becoming more selective as emissions rules and federal incentives fade, prompting fleets to prioritize total cost of ownership and operational fit.
- ACT Research said removing federal tax credits makes many electric truck applications less economical, while drayage, last-mile delivery and yard operations remain viable use cases.
- Manufacturers continue investing in electrification as fleets diversify powertrains, with industry observers expecting modest electric truck sales through 2027 before stronger interest later.
The market for electric-powered commercial vehicles is entering a more selective phase as truck emissions rules and federal incentives that supported early deployments disappear.
Instead of planning around a broad national transition to zero-emission trucks, fleets are weighing total cost of ownership, operational feasibility and customer expectations.
“I think the general uncertainty and cautiousness is impacting people. Plus, when you figure the for-hire trucking fleets have been in a four-year freight rate recession, there just wasn’t money for a capex spend,” said Ann Rundle, vice president at ACT Research.
ACT Research’s TCO data shows that removing the federal tax credit shifts many electric truck applications from favorable territory into marginal or unfavorable positions. Yard tractors and last-mile delivery vehicles remain among the strongest fits. The most attractive opportunities generally involve smaller batteries, shorter routes, lower speeds and less expensive charging infrastructure.
Prasad Ganorkar, a partner with McKinsey, expects EV adoption to advance in specific operating segments rather than broadly across the transportation industry. Battery-electric vehicles account for less than 1% of new Classes 6-8 truck sales in North America, but adoption continues in last-mile delivery, port and drayage operations, municipal fleets and fixed routes that return to a hub.
“There is still commitment, but it’s a bit more tapered down,” he said.
RELATED: For many fleets, terminal tractors are where electrification pencils out
Clint McCoy, executive vice president and chief operating officer at FedEx Freight, said the less-than-truckload carrier is taking an application-specific approach. The most suitable use cases feature predictable routes, consistent daily mileage and reliable charging opportunities.
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(Ceri Breeze/Getty Images)
“Whatever the application, the vehicle needs to fit seamlessly into our day-to-day operations,” McCoy said. “To put it simply, from a fleet operator’s perspective, we need these new technologies to be just another truck, another tool that easily fits in our network.”
FedEx Freight is investing in electric forklifts and yard trucks at service centers and added 20 electric yard trucks during its current purchasing cycle. The fleet ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Volvo Trucks North America also sees continued potential in drayage and regional-haul operations.
Jared Ruiz, regional vice president, said fleets operating Volvo VNR Electric trucks have demonstrated that Class 8 battery-electric equipment can perform successfully in those applications.
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Ruiz
Routes operating in and around ports and urban areas also can deliver air-quality benefits in densely populated communities.
Ruiz said fleets have renewed their focus on TCO as federal support has declined. State-level incentives, particularly in California, can still narrow the difference in acquisition cost, which can be more than double for a battery-electric model compared with a diesel. Meanwhile, third-party charging providers may allow fleets to deploy trucks without making the full infrastructure investment at their own terminals.
Fuel-price volatility is another factor in the equation. Ruiz said fluctuations in diesel prices have prompted some fleets to compare the relative stability of electricity costs with the uncertainty of forecasting diesel expenses.
Customer expectations also continue to influence fleet decisions.
“Large shippers are increasingly focused on sustainability, and fleets must be responsive to those evolving priorities,” FedEx Freight’s McCoy said.
RELATED: Rising fuel prices have forced fleets to act
At the same time, he noted that environmental sustainability initiatives must be balanced with operational performance.
“While sustainability goals may influence technology evaluations and pilot deployments, fleets cannot compromise operational reliability or service commitments,” McCoy said.
Despite changes in the regulatory environment, manufacturers continue to invest in alternative powertrains.
Volvo previewed a next-generation VNL Electric for regional-haul, drayage and city-distribution applications at ACT Expo 2026. The company’s certified EV dealer network has expanded to 84 locations across 33 states and four Canadian provinces.
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Volvo's VNL Electric. (Volvo Trucks North America)
“We think electric truck sales will remain modest through 2026 and into 2027, with growing interest in 2028 and beyond,” Ruiz said.
IDTechEx similarly expects U.S. electric truck sales to stagnate or decline slightly in the near term before growth resumes.
“With support now on the way down, trucks will be reliant on the continuing fall in battery prices, shifts in global diesel or electricity costs, or newly unlocked efficiencies in vehicle design to achieve viability,” said Pranav Jaswani, senior technology analyst at IDTechEx.
Lower battery prices, vehicle-efficiency improvements and changes in the relationship between diesel and electricity costs could strengthen the economic case for electric trucks.
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Emilia Sibley, an emerging technologies consultant at the North American Council for Freight Efficiency, said fleets are responding to uncertainty by diversifying their equipment portfolios. Diesel, renewable diesel, natural gas and battery-electric vehicles are increasingly being matched to specific applications instead of treated as part of a single fleetwide transition.
Rundle of ACT Research said decarbonization does not necessarily require a shift to zero-emission vehicles.
“You are seeing more for-hire fleets really advocating for and looking into biodiesel and renewable diesel,” she said.
Although U.S. demand for electric trucks has softened, Rundle said global manufacturers are likely to continue investing in electrification to meet future demand and serve markets outside the United States.
“From a technology perspective, that technology is still being developed. It’s still being moved forward,” she said. “Battery development is happening and costs are dropping.”
McCoy said those advances will expand the number of applications in which electric trucks can succeed.
