Europe's truck giants lobby to soften CO2 rules

When seven of Europe's most powerful truck manufacturers and their principal industry body wrote to the European Commission earlier this year, they framed their message as a matter of infrastructure. The joint letter, signed by Daimler Truck, Volvo Group, TRATON, DAF Trucks, Iveco, Ford Otosan and the European Automobile Manufacturers' Association (ACEA), argued that the "constrained" uptake of electric trucks was the result of the "slow rollout" of charging facilities, and called for an early review of the EU's CO₂ standards for heavy-duty vehicles.

The request was, on its face, reasonable. But to a growing body of analysts and ‘clean-freight’ experts, the letter reads less as a technical argument than as a strategic manoeuvre, one with an uncomfortable precedent. Under the current framework, truckmakers must reduce CO₂ emissions from new heavy-duty vehicles by 45% by 2030 and 90% by 2040, with a formal review already scheduled for 2027. That review is now the target. Critics contend that the manufacturers are seeking not a genuine assessment of progress, but an early opportunity to negotiate down obligations they have shown little appetite to meet, and at a moment calculated to minimise resistance.

The unsustainable investment conflict

The most pointed counterargument to the infrastructure complaint lies in the financial record of the industry itself. Between 2019 and 2024, Europe's five largest truckmakers generated €57 billion ($66 billion) in net profits. Of that sum, 66% was returned to shareholders, with dividends and buybacks now outpacing research and development spending.

The numbers for individual companies are similarly striking. Volvo Group last year reduced its investments in low- and zero-emission projects, while paying shareholders roughly three times more than it invested in zero-emission technologies. Daimler Truck, whose own chief executive has stated that "scale is key to winning in the technological transformation of our industry," is currently spending as much on shareholder returns as on R&D, and has simultaneously scaled back investment in battery technologies.

This capital allocation is not more than just a concern for long-term planning. Experts argue that it is a structural choice to keep electric truck volumes artificially low and prices artificially high, in order to protect the near-term margins that flow from diesel sales. The consequence is that more than 50% of the fleet market remains effectively locked out of switching to electric by 2035, because the vehicles that would allow it do not exist at accessible price points.

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"By prioritising short-term payouts over the future of freight, European truckmakers are steering straight into a competitive trap,” said Ben Scott, Head of Energy Demand at Carbon Tracker. “When Volvo and Daimler combined, return nearly €5 billion ($6 billion) to shareholders in a single year, allowing dividends and buybacks to outpace their own R&D spending, it isn't a victory for investors - it's a red flag for long-term competitiveness. Reopening EU CO₂ standards now only signals that legacy truckmakers are unready to compete, effectively rolling out the red carpet for low-cost international rivals who are already undercutting them by up to 36%." 

Fleets left carrying the cost

While manufacturers deliberate over capital returns, European hauliers are absorbing the consequences of stagnant electrification in real time. Across the continent, diesel fleet operators are facing fuel cost increases running at 1.5 times the rate of their electric counterparts. In Germany, where the cost differential is sharpest, diesel fuel costs are climbing more than 2.5 times faster, forcing operators to absorb roughly €1,760 ($2,050) in additional monthly energy costs per vehicle when compared with electric alternatives.

These margin erosions are happening at scale - across an industry in which energy costs represent one of the most significant operating variables. The irony is that the manufacturers lobbying to weaken the very rules designed to accelerate electrification are, in effect, prolonging the conditions that are squeezing their own customers.

The competitors knocking at the door

The deeper risk in the manufacturers' strategy is potentially more competitive than it is regulatory. Chinese manufacturers, among them BYD and Windrose Electric, are preparing to enter the European market with electric trucks expected to be priced up to 36% below those offered by legacy European brands. Windrose's Global E700, for example, is already priced roughly €70,000 ($81,500) below comparable European articulated electric trucks.

Once again, we see Chinese automakers outpacing their Western counterparts across various strata of EV manufacturing, from Design for Manufacture (DFM - where speed to market is maximised by bearing manufacturability in mind while designing from the outset), through to high-tech, low-priced vehicles. AMS recently ran a story about Ford’s own CEO, driving a Xiaomi SU7, and refusing to give it back, exposing a major flaw in the legacy approaches to this new era of electrification. 

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In the truck space, evidence from the United States reinforces the trajectory. Research shows that electric trucks produced by Daimler Truck, Volvo Group and Paccar are hundreds of thousands of dollars more expensive than the Tesla Semi, and deliver a fraction of its range and charging performance. If that pricing dynamic migrates to Europe, the legacy manufacturers will have sacrificed market share to preserve a short-term margin structure that is already eroding.

"Analysis shows that, already under current legislation, the share of zero-emission trucks in new sales by 2030 could fall from around 35% to just 18–28%, amounting to roughly 200,000 fewer zero-emission vehicles over the next decade,” said Merlin Jonack, Project Lead for Heavy-Duty Vehicle Decarbonisation at NABU.

“This would not only slow the urgently needed scale-up of e-trucks, but could also lead to millions of tonnes of additional CO₂ emissions. While China is rapidly expanding its electric truck market, Europe risks losing market share, industrial leadership, and jobs. The stop-and-go approach seen in the CO₂ rules for cars must not be repeated in the truck sector."

The cost of regulatory uncertainty

The lobbying effort itself has drawn scrutiny as much for its method as its substance. InfluenceMap, the policy influence analysis firm, has noted a structural parallel with the campaign mounted by carmakers last year, in which ACEA successfully pressed for an early review of EU car and van emissions standards, ultimately securing significant concessions that weakened the policy.

"Last year, carmakers, alongside ACEA, successfully pushed for an early review of the EU's car and van emissions standards, allowing them to secure significant concessions to weaken the policy during its review,” said Tom Magowan, Analyst at InfluenceMap.

“Representing truck manufacturers, ACEA now appears to be using a similar strategy to target emissions standards for heavy-duty vehicles, posing a serious threat to the ambition of this policy and the broader electric vehicle transition."

The Norwegian EV Association, meanwhile, draws attention to the systemic effect on investment confidence. For manufacturers, suppliers and fleet operators making multi-year capital decisions, the predictability of regulatory targets matters as much as their ambition. An early review, even one that does not formally weaken the targets, introduces uncertainty that flows through the entire investment chain.

"ACEA's call for an early review of the CO₂ standards comes at a critical moment for the transition to zero-emission trucks. While it is important to assess progress, maintaining strong and predictable targets is key to providing investment certainty, scaling up production, and reducing costs for operators. Weakening the framework now risks slowing down the transition and could ultimately affect Europe's long-term competitiveness," said Maren Hemsett, Senior Advisor at the Norwegian EV Association.

Competitors won't wait

Manufacturers have already extracted meaningful concessions from EU policymakers. Last year, Daimler Truck, Volvo Group and TRATON successfully lobbied for weakened compliance rules under the 2030 CO₂ standards. Analysts estimate those changes could reduce electric truck sales in Europe by up to 27% by 2030. The current push for an early review of the broader framework appears to follow the same logic: test for further flexibility while the political window allows it.

But the window may be narrower than the manufacturers assume. Foreign competitors are not waiting for the European regulatory debate to resolve itself. They are pricing their products and building their supply chains now, against the assumption that demand will eventually follow the trajectory that European manufacturers appear determined to retard. If the CO₂ targets hold, the investment incentive to produce affordable electric trucks at scale will assert itself. If they are weakened, the market will simply import the vehicles that European factories chose not to build.

Europe's hauliers need affordable electric trucks. The technology exists, the demand is forming, and the economics of diesel are worsening by the quarter. What the continent cannot afford, analysts warn, is to allow its largest truck manufacturers to use regulatory lobbying as a substitute for industrial strategy.