International mulls phasing in EPA 2027 engine introduction

International’s truck orders soared 209% in the second quarter to 22,924 from 7,416. (International Motors)

International Motors may decide to stagger the introduction of model-year 2027 engines compliant with incoming nitrogen-oxide emissions regulations, the top executive at parent company Traton Group said July 23.

But International has yet to decide whether to keep producing engines that had been due to be phased out, Christian Levin said after the release of the company’s second-quarter 2026 earnings.

The comments, coincidentally on the same day Cummins unveiled plans to phase in X15 and X10 engines compliant with the emissions regulations, added to the ongoing fallout from the draft rulemaking issued July 9.

Volvo Group CEO Martin Lundstedt on July 17 warned that the lens on second-half 2026 truck sales had been fogged up by the rulemaking.

Levin, discussing the impact on an analyst call after the release of the earnings, noted that flexibility in compliance with the regulations would stimulate further discussions.

“It does not change our position. I still think that we are in a very favorable place. Let’s see how this finally plays out,” he said. “We now start discussions with customers for 2027 orders, which is, of course, bothersome in a situation where EPA27 is not totally clear.

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Levin 

“We can, of course, also choose to continue with the current platform if that is financially more viable. Still, exciting times in the U.S. to see where this finally ends up. We are five months to the legislation [becoming effective]. This is, of course, a very unusual situation. I think, again, we have really good optionality.”

International was the first of the North American heavy-duty truck and engine makers to debut EPA 2027-compliant engines in January, even as OEMs wrestled with holes in their knowledge of what the fine print of the rulemaking would see. Those holes were so large OEMs were unable to tell fleets how much trucks would cost.

“We are marching forward as though this emissions regulation lands at the beginning of 2027,” Dan Kayser, executive vice president of commercial operations at International, said during a Jan. 7 media roundtable.

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Kayser 

International’s S13 integrated powertrain, including the S13 engine, was initially launched in August 2022.

“We have the youngest engine platform in the world, which was from the beginning conceived for EPA27,” said Levin.

And Levin and Chief Financial Officer Michael Jackstein told analysts that orders for International trucks shot up in the second quarter, even if sales strength — as has been the case for all North America’s truck makers in 2026 — did not correlate.

Sales of trucks at International fell 10% in Q2 to 13,130 vehicles from 14,628 in the year-ago period but rose 26% compared with 10,413 trucks in the first three months of 2026.

International's orders surge

International’s truck orders soared 209% in the most recent quarter to 22,924 from 7,416 and rose 22% compared with Q1’s 18,859 vehicles.

Partly as a result, Lisle, Ill.-based International posted its first quarterly profit in a year in the most recent three-month period, bringing home a $151.29 million operating profit in Q2, almost triple Q2 2025’s $53.46 million. Traton reports earnings in euros, and all conversion rates were correct as of July 23.

The biggest factor in the return to the black, however, was International’s ability to book $136.5 million in Section 232 tariff refunds and recoveries for U.S. content under International Emergency Economic Powers Act tariffs.

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Jackstein 

Soaring orders in the first half of 2026 will boost earnings in the second half of the year, Jackstein told analysts, and the ongoing rebound in the freight market boosted confidence in truck sales.

Traton now expects North American Class 8 sales to be between 259,000 and 284,000 trucks, compared with 259,000 trucks sold in 2025. The company maintained the top end of its forecast but raised the floor from 246,000 trucks.

The orders reflect “improving U.S. fleet economics, strong freight rates and some EPA ’27 pre-buy activity,” said Levin. “This gives us increasing confidence for growing deliveries in the upcoming quarters. At the same time, one should remember that in our markets, the tariffs, the overall geopolitical uncertainty, have not at all disappeared.”