What do the cards say for 2025? Fleet managers will need foresight, strategy, and adaptability to navigate the new challenges and opportunities.
Can the fleet industry simultaneously experience stability and disruption? Yes, actually — and 2025 seems to be the year in which this hypothesis will play out. The unpredictable turns predictable, yet new wildcards emerge.
With fewer models under allocation, vehicle supply and shortened delivery schedules have returned. Yet new cost pain points, an uncertain regulatory landscape, and shifting corporate sustainability goals form a complex road ahead. The new wildcard? When and how tariffs will manifest and affect fleets.
Ed Powell, director of consulting services at Holman, sums up the industry’s current state: “Budgeting is a clear area of focus for 2025 for virtually all fleet operators,” he said. “Even with inflation cooling and interest rates dipping slightly, operating costs have surged more than 20% since 2020.”
Powell sees fleets tempering forecasts for new vehicles this year, as fleets were able to satisfy their pent-up needs in 2024. “As a result, the need to order new units isn’t as acute and there will likely be a cascading effect in 2025,” he said.
For fleet managers, adaptability will be a key theme.
“If I had to pick one word to describe 2025, it would be ‘pivot,’” said Jason Kraus, VP of operations at Mike Albert Fleet Solutions. “Supply chains are healing, but interest rates aren’t dropping as fast as fleets hoped. That means every acquisition, financing deal, and remarketing decision has to be carefully measured.”
Supply Chains Are Stabilizing
Fleet supply chains are stabilizing, but some segments continue to lag. Production slots for cargo vans, full-size SUVs, and hybrids remain tight, while availability for mid-size pickups has improved but at higher costs.
Cargo van demand is still outpacing supply, forcing fleets to rethink their vehicle configurations. “Compact vans still lack a direct replacement,” noted Kraus, “so fleets are improvising with mid-size pickups with storage solutions or shifting to SUVs with partitions.”
OTD (order-to-delivery) times continue to improve, with MY-24 vehicles achieving an 18-week average, down 23% from MY-23, according to data from Mike Albert Fleet Solutions. “We anticipate MY-25 will reduce further to 15 weeks, though that’s still higher than the 12-week averages we saw pre-pandemic,” Kraus added.
Transaction Prices Creep Higher
According to data from Cox Automotive, the average transaction price (ATP) for all new passenger vehicles in January 2025 was $48,641. That is only a slight dip from the record ATP set at the end of 2022 — at the height of the supply chain crisis — with reductions driven primarily by a single automaker.
According to Work Truck Solutions’ 2024 Annual Commercial Vehicle Market Analysis, the average new vehicle price for commercial fleets has remained relatively flat, with only a 1.1% increase year over year.
Cox Automotive also predicts that used values will follow more normal depreciation patterns in 2025. EVs and luxury vehicles will see steeper depreciation declines while work trucks and vans remain more stable.
Depreciation Patterns Normalize
With high initial transaction prices, a firm used car market will keep holding costs in check. Lease maturities are expected to dip in 2025 year over year, decreasing by 17% from 3.03 million vehicles to 2.36 million vehicles.
“The secondary market, both auction and wholesale, is expected to face supply constraints in 2025,” said Holly Vollant, remarketing manager at Holman. “Additionally, the average used vehicle hitting the secondary market will be older, have higher mileage, and likely have considerably more wear than the pre-pandemic inventory.”
“Retail used vehicle sales are expected to rise slightly, but we’re not expecting a major influx of inventory,” said Matthew Gast, director of operations at Mike Albert Fleet Solutions.
The Manheim Used Vehicle Value Index is projected to increase 1.4% year over year by December 2025 — an increase but slightly lower than the typical 2.3% annual gain.
With increased vehicle production and growing inventories, incentives are back up to 7% of ATP. While still not at pre-pandemic levels, higher incentives could erode residual values at the end of the cycle.
“OEMs are returning to fleet incentives, which is a relief after years of inflated pricing,” said Patrick Doyle, director of supply chain solutions at Holman. “But incentives vary wildly between manufacturers, meaning fleets need to shop smarter.”
Fuel Prices Ebb, Financing Costs Remain High
Also on the positive side, fuel prices are expected to fall slightly, with the U.S. EIA forecasting a 5% decline compared to 2024.
The Federal Reserve has signaled only modest rate cuts in 2025, meaning financing costs will remain elevated compared to pre-pandemic levels.
Tim Mundahl, director of fleet consulting at Merchants Fleet, noted that the two rate cuts in 2024 moved us toward a more normalized, less inverted yield curve. In non-finance speak, this signals a more stable economic outlook rather than an impending downturn.
Red Flag: Technician Shortages & Maintenance Costs
However, fleet maintenance costs remain a major concern. While parts prices and availability have improved, the lack of skilled technicians is driving labor rates higher and causing delays in service times.
Chris Foster, director of fleet management services at Holman, warns that this problem will not go away soon.
“There is a critical shortage of qualified technicians throughout North America, and as demand grows, most maintenance vendors find themselves increasing wages to hire and retain technicians. This is driving labor rates significantly higher, increasing pressure on already strained maintenance budgets,” Foster said.
Demographic changes are intensifying the problem. “A shortage of technicians continues to be an issue due to retiring baby boomers and shifts in career preferences post-pandemic,” Kraus said.
Even though postsecondary technician training programs are seeing a slight increase in enrollment, it’s not enough to offset retirements.
Referencing a recent study by TechForce Foundation, “Most of the current need for technicians is driven by retiring and transitioning technicians, while only 25% of the demand is from actual industry growth,” said Bryan St. Eve, vice president of sales and operations at Enterprise Fleet Management.
According to St. Eve, to meet demand in key fleet sectors like diesel, automotive, and collision repair, the technician replacement rate will need to be four times higher than its current trajectory.
Another aggravating factor for repairs is work vehicle age: According to Work Truck Solutions, the median mileage of used commercial vehicles has increased 9.4% year over year, reflecting extended fleet cycles.
The technician shortage isn’t just affecting vehicle maintenance — it’s also hitting upfitters and service body installers.
“A shortage of technical installers has increased lead times for installation,” noted St. Eve. “Although we expect minimal equipment price increases at around 2% to 5%, there are concerns about potential unknown effects of tariffs.”
Tariffs: A New Supply Chain Threat?
Which brings us to the daily headlines around tariffs, perhaps the biggest wildcard for 2025 and beyond.
“Potential tariffs could significantly impact the upfit and commercial equipment sector,” said Brent MacLean, vice president of sales, commercial vehicle equipment at Holman.
“Whether it is the raw materials or the components and products imported to assemble work-ready vehicles, tariffs could introduce major cost implications,” he added. “We’re likely to see increased costs for manufacturers and distributors, which will ultimately impact fleet operators. The added uncertainty may also cause fleets to hesitate in making investment decisions, further complicating long-term planning.”
Stephen Latin-Kasper, economist and CEO of Coherent Market Planning, warns that tariffs could undo recent supply chain recoveries: “If tariffs increase, especially on parts imports, we could see another round of inflationary pressures in fleet maintenance costs,” he said.
“The biggest concern I have right now is how will the tariffs and trade war impact fleet, from a supply chain, vehicle price, and operating costs perspective,” said Jennifer VrMeer, fleet manager for BD, a global medical device company.
“A lot of the parts come from China and Mexico — and surely OEMs are not going to absorb those,” she said. “We have already seen a steady climb of cap costs in the past few years.”
Regulatory Uncertainty Looms
The transition to EVs is hitting speed bumps. Political uncertainty around federal EV incentives, infrastructure investment, and the California Air Resources Board’s (CARB) authority to set more stringent emissions rules is making some companies rethink their timelines.
“Fleets are managing diverse regulatory approaches at federal, state, and regional levels, complicating business decisions among uncertainty,” said Lisa Drake, director of fleet electrification at Merchants Fleet.
“Reacting to a fluctuating regulatory environment can leave an organization choosing between inaction and progress. Although most fleets are not ready for a full EV transition, many can begin their ZEV journey in small but impactful ways and the benefits to their business will be more than dollars and cents.”
“Fleets that have already integrated EVs may continue to do so, but for those that have been hesitant, adoption may be slower as they wait for improved charging infrastructure, and greater certainty on residual values in addition to regulatory decisions,” said Dain Giesie, vice president of business development at Enterprise Fleet Management.
For Bruce Birdsell, fleet manager at mechanical contractor Hermanson Company LLP, the present crop of electric work trucks doesn’t satisfy his duty cycles.
“The technology just isn’t there for how we use our vehicles,” he said. “The rules keep changing, and we have to stay ahead of them, but I don’t see anyone offering practical solutions for work trucks that need range, payload, and upfit flexibility.”
Will CARB Retain Authority?
With ACF’s waiver application rescinded and waivers already granted for ACT and ACC II being challenged on multiple fronts, can CARB even retain authority in the biggest state in the U.S.?
“CARB’s authority within California itself would likely remain intact,” said Maria Neve, VP of eFMC Services at Inspiration Mobility, because its regulatory power is derived from state law, not directly from the federal government.
“California could still set and enforce its own emissions standards and regulations for vehicles sold or operated in the state,” Neve said. “There are likely additional federal preemption challenges specific to CARB’s mandates coming, which will inevitably be tied up in litigation for a while. It’s too soon to predict how it will all shake out.”
EVs Reach TCO Parity
Yet amidst this uncertainty, moderating prices are driving better TCO in more vehicle segments and duty cycles.
“If one segment is primed for EV expansion, it’s last-mile delivery,” said Kraus. “The combination of improved charging networks and more purpose-built models is finally making it viable.”
“Most light-duty EVs introduced by OEMs in the past few years entered the market with an upfront cost premium of $12,000-$15,000 over their ICE counterparts,” explained Adam Seifert, director of fleet advisory & analytics at Inspiration Mobility.
“However, OEMs are actively cutting costs, and we’ve already seen price reductions of up to $5,000 for 2025 models. In fact, tariffs on EVs and battery components were already increased last summer, and we’re seeing battery and component prices drop as vehicle production continues to ramp up in the US. EV-ICE price parity is within reach, even if the $7,500 federal tax credit disappears.”
Despite this, the shifting regulatory landscape could stall momentum as some fleets continue their wait and see approach. “Even though EVs offer cost savings for most use cases, fleets must do what makes sense for them,” said Neve.
“No one will ever argue with changes that improve driver experience and save money,” she said. “The ROI on EVs is real, and in many cases, electrification aligns with fleet goals — lower costs, improved reliability, and higher driver satisfaction. But regulatory uncertainty makes it a bit more difficult for organizations to factor in ideal timing for moving forward with their EV transitions.”
Fleet Tech: Video Telematics & Autonomous Progress
The pace of technological advancements is quickening. AI-enhanced telematics, video-based driver monitoring, and predictive maintenance tools are reshaping fleet management.
“We’re moving from reactive incident reporting to real-time intervention,” said Emily Graham, director of energy and connectivity at Holman. “In recent years, advancements in telematics technology have changed the ways fleet operators manage safety. Rather than simply reacting to an incident after the fact, technology such as video-enabled telematics now allows fleet operators to provide alerts or coaching in near real-time, which is a game changer.”
Autonomous transport could reach its tipping point in 2025, with a loosening regulatory environment and major players like Tesla and Uber about to roll out services.
Waymo is no longer an experiment. The Alphabet subsidiary offers 150,000 rides and a million miles of fully autonomous robotaxi service every week.
But that’s robotaxis. On the commercial fleet side, Gatik is continuing to expand its middle-mile deliveries, while driverless off-road applications in mining, agriculture, and yard operations are taking shape.
Meanwhile, fleet management companies are studying how autonomous vehicles could be integrated into their mobility solutions suites.
