Auto & fleet industry: What to expect through 2025

Fleets are undergoing significant changes, but we may see a return to a new normal this year. What trends and updates are we seeing—and can expect to see in 2025? We talked to a couple of our fleet experts to find out.

The auto sector and fleet world are undergoing significant changes, but we may see a return to a new normal this year. What trends and updates are we seeing—and can we expect to see—in 2025? We talked to our fleet experts, Lars Nielsen, Regional Vice President of Fleet Sales, and Jason Kraus, Vice President of Operations, to find out.

updated August 2025

What are the fleet industry’s “action items” this year?

Fleet managers must be prepared for anything and everything in 2025.

“If the 2025 fleet industry was distilled to one word, it would be ’pivot’,” says Kraus. “Everyone has to be ready to pivot, whether it’s dealing with increased supply and continued demand, decreasing inflation rate and stagnant interest rates, or the Trump administration changing direction from the Biden administration.”

The market may never return to pre-pandemic times—fleet managers have to contend with longer order-to-delivery (OTD) times, higher interest rates, reduced incentives, and lower production model volumes. Even the job of fleet manager has changed, with many fleet managers having to lead the fleet alongside other job responsibilities.

Here are a few of the significant changes coming in 2025:

Supply chain issues—are we back to pre-pandemic conditions?

Since COVID-19, shortages of vehicles, parts, and aftermarket equipment have left many fleet managers scrambling to source (and upfit) new vehicles, repair existing ones, and keep fleets operating efficiently. Some positive signs are pointing towards a return to pre-2020 availability conditions:

• According to Cox Automotive, the new vehicle inventory fully recovered in 2024, returning close to pre-pandemic levels. In July 2025, both new and used inventory levels declined.
• This marks a significant milestone after years of supply chain disruptions, especially in semiconductor availability. However, sales volumes have not fully returned to 2019 levels. Cox projects 2.04 million new car registrations in 2025, which is still 11.6% below the 2000–2019 average.
• Cargo vans are no longer out of stock everywhere, though the average days-to-turn (DTT) hasn’t entirely returned to the 2019 levels.
• Light-duty vehicle prices have been on a downward trend due to discounted EVs, but prices for commercial vehicles are expected to remain high. Even with supply climbing, new vehicle prices are +33% from 2019 to 2025 levels.
• Model year 2026 order banks have returned to an open order basis, not an allocation basis. This means that order banks will remain open until the OEM has received the number of units planned for production. So, you have some time to place factory orders-- but not likely 6+ months. It depends on the make/model. OEMs are allowing price protection at the time of order submission, and all orders can be scheduled (i.e., 20 units over 4 months = 5 units for each of the next 4 months).
• Compact vans still lack a direct replacement, with most fleets opting for compact or mid-sized pick-up trucks with a cap and pull-out drawers or compact or mid-sized SUVs with a partition and shelving. Many fleets prefer one of these alternatives versus upgrading to a full-sized cargo van since the initial cost and fuel economy are still too high.
• While EV production slots are widely available, hybrid production slots are still tight depending on the make and model.
• MY2024 achieved an 18-week OTD, down 23% from MY2023. Kraus mentions that MY2025 has increased slightly to a 20-week OTD—still much higher than the 12-week OTD average in 2015-2019.
• Used vehicle prices are on the rise again. According to [Cox Automotive Chief Economist Jonathan Smoke] (https://www.coxautoinc.com/market-insights/cox-automotive-auto-market-report-april-15-2025/), used vehicle supply is still constrained, putting  upward pressure on prices. This is the lingering effect of the production shortfalls during the early pandemic years.
• In terms of non-vehicle shortages:
• There continues to be a shortage of new technicians and mechanics. With the retirement of baby boomers, the popularity of other job types, and historically low unemployment, the field is expected to continue languishing. This has also led to an increase in maintenance and labor costs.
• Parts and components availability has improved dramatically, although there may be shortages related to quality matters for a given component.
• Conflicts between the United States and China may affect our supply of aluminum, nickel, cobalt, titanium, and other minerals. China also supplies 50% of the world's steel.
• Chinese imported aluminum and steel tariffs are at 50% and stackable with automotive tariffs of 25% for service parts or components used in final assembly production plants.
• Upfitting parts and service bodies are readily available, but with the new tariffs, prices could rise.

For more information on model year 2025 forecasts and the current state of production, hear from Kraus in these Fleet Studies Lab articles:

• Electric Vehicles: What to Expect in the Auto & Fleet Industry for MY2025
• Fleet Vehicles: What to Expect in the Auto & Fleet Industry for MY2025
• Medium & Heavy-Duty Commercial Vehicles: What to Expect in the Auto & Fleet Industry for MY2025

Operating costs and tax credits are still in flux.

The economy has been topsy-turvy the last four years, but it seems as though things will begin to even out. The slight decrease in unemployment, decreased inflation and rising GDP, suggest that the economy is starting to reach a new high. With inflation on its way to the 2 percent mark that the government is looking for, the Fed last made a reduction in December to rates between 4.50-4.25%.

Fleet owners should also continue to expect increased operating costs, especially for maintenance, insurance, and fuel. Fuel is slightly down, but geopolitical challenges may cause that number to shoot back up again.

• The Inflation Reduction Act of 2022 (IRA) is being phased out, with the $7,500 EV tax credit requiring invoicing on applicable vehicles by 9/30/2025.

Vehicles purchased brand new after April 2023 that adhere to the price and one of the two other requirements will only be eligible for half of the tax credit, or $3,750.

In response, some manufacturers have lowered prices to maximize the opportunity for consumers, while others have increased prices on EVs that don’t qualify. Fleet owners should remember that “decreases in vehicle pricing often hurt residual values,” says Kraus.

EVs—prices likely to increase, but OEM’s still looking for fleets that want to convert at this time

While some state and federal governments are still interested in making dedicated efforts for full zero-emission fleets, carmakers and companies are stepping back from current EV plans. The main reason for this is declining gas and diesel prices—EVs were more appealing when gas was $5 a gallon, but now that it's back down to $3, it doesn’t seem “worth it” for the average consumer to purchase an EV. The lack of infrastructure and slow market movement is also stunting the electrification industry as a whole. For many, sustainability is now seen as a “nice to have,” even with increased weather events like hurricanes, flooding, and tornadoes.

At the same time, though, EVs had their best-selling year ever in 2024, with a record 1.3 million units sold in the United States. But there are challenges abound for all OEMs on EVs, and even more so for EV-only OEMs.

So, what does that mean for fleets? Kraus urges fleet managers to recognize whether a shift to EVs suits their company.

“Just as your investment advisor would recommend having a balanced portfolio, I’d suggest you consider this approach to your fleet operations,” he says. “There is a lot of talk about EVs, but it’s more important to recognize the different types of powertrains and consider what may or may not be an appropriate addition to your fleet.”

Kraus also adds that in 2025, the outlook for EV market stabilization depends on the innovations that the OEMs come up with next. “If one vehicle segment is the most likely to increase, it’s cargo vans,” he says. “Their application is best aligned with what’s available now—better range and better payload.”

One of the next big changes? Battery technology. Most OEMs are beginning to shift to 800-volt architecture, which allows for faster charging. Kraus believes the next big milestone will be solid-state batteries, smaller and lighter batteries that help vehicles attain twice as much range. He notes, though, that when solid-state batteries hit the market, they’ll be found in premium or performance vehicles before shifting to more commercially available ones.

As the push toward electrification continues, there’s another interesting opportunity to keep an eye on: the data that can be harvested from charging stations. “We already have telematics partners and charging infrastructure partners that can pull some really interesting data from EV charging stations,” Nielsen says—including things like duration of charge, miles and kWh added during a session, and amount of CO2 avoided. That data can be used to make critical business decisions that improve efficiency, productivity, and decarbonization efforts.

Regulations set to change

One of the largest changes expected to occur is around the new Phase 3 greenhouse gas pollution standards created by the EPA. These standards require truck manufacturers to begin emission reduction by choosing a clean alternative (EV, biofuel, and hydrogen). This phase-in will begin with 2027 model-year vehicles, with the hope that by 2032, all new trucks will have reduced emissions by 60%. Truck experts expect massive pre-buys to happen this year, next year, and the first quarter of 2027, meaning that vehicles purchased now will not be as expensive as those after January 1, 2027, but will be at a premium based on increased demand. However, it’s just as likely these new regulations will be revoked or significantly altered, pushing off clean truck requirements even further than 2032.

Other regulations and standards that may be changed or even discontinued include the CHIPS and Science Act, increased Corporate Average Fuel Economy (CAFE) standards, an Automatic Emergency Braking (AEB) mandate in 2029, and even more.

“Each of these individually and all collectively impact the daily efforts and strategic plans of fleet managers,” says Kraus.

Rise of embedded telematics and AI

Everyone in fleet management knows that telematics are critical for making data-driven decisions. OEMs have firmly implemented themselves in the trend, with nearly all of them offering embedded telematics and subscription platforms to broadcast vehicle data directly to fleet managers.

For fleet managers, that means more data to collect and analyze for the improved operation of their business—and “it can lower the cost of your telematics program since you won’t have to purchase plug-and-play devices,” notes Nielsen.

However, Kraus warns that open-source data isn’t something OEMs offer quite yet. “Keep in mind that OEMs do not share all of their data open-source with telematics service providers and data aggregators, which is a challenge when fleets typically operate a mix of OEMs and need a common platform to manage daily operations.”

AI and Advanced Driver Assistance Systems (ADAS) are other pieces of technology that the fleet industry expects to become more prominent in 2025. As safety technology improves, Kraus says fleet managers are excited by Level II ADAS becoming the industry standard—but are less excited by Level III or Level IV ADAS. The reason? More advanced ADAS can make drivers more lax on safety, and the technology has had its fair share of poor coverage. AI can help create teachable moments when ADAS activates, such as through camera recordings, but fleet managers must continue to make safety a priority and keep drivers up to date on what to know.

Regarding the auto and fleet industries, “the only constant is change”—so we can expect the landscape to shift even more in the months and years ahead. Want to stay ahead of the curve? Stay up-to-date on fleet resources and news by following Mike Albert on LinkedIn.