Emissions Rule Reversal Sends Shockwaves Through European Truck Market

European truck makers are facing share declines following the U.S. EPA's announcement of a potential reversal of vehicle emissions rules. This has led to reduced expectations for pre-purchase boosts previously anticipated before new regulations. The rollback could significantly impact market dynamics in the coming years.

Shares of European truck manufacturers took a hit on Thursday after the U.S. Environmental Protection Agency (EPA) announced plans to reverse vehicle emissions rules set by the Biden administration. The anticipated reversal has squashed expectations of a surge in pre-purchases of trucks, previously forecasted for the latter half of this year and 2026.

According to Pal Skirta, an analyst at the German brokerage Metzler, the market now believes the stricter regulations will not materialize, leading to a drop in buying activity. This sentiment was echoed by a spokesperson for Daimler Truck, which saw its shares fall 5%, positioning it as the worst performer on Germany's blue-chip index.

The EPA's new stance has prompted concern within the industry, given its potential to disrupt buying cycles and affect sales expectations for 2025. Even with the revised regulations hinting at increased costs for smog-reducing systems, major markets like the U.S. remain pivotal for large manufacturers such as Daimler and Volvo, the latter of which considers North America its second-largest market.

(With inputs from agencies.)