Daimler Shares Plummet as U.S. Reviews Truck Emission Regulations

In a significant development for the automotive sector, the U.S. government has announced plans to review and potentially roll back stringent emission regulations for trucks. This decision has had immediate repercussions on the stock market, particularly affecting Daimler Truck, a leading global manufacturer of heavy-duty vehicles.

On Thursday, shares of Daimler Truck experienced a dramatic decline, plummeting by as much as 14.6% to reach EUR34.84, marking the lowest point in over three months. The company's stock performance was notably the weakest among the DAX index, while shares of competitors such as Volvo and Traton also fell, each dropping by more than 5% during the same period.

The Environmental Protection Agency (EPA), recently restructured under the Trump administration, announced a comprehensive package of over 30 regulatory rollbacks aimed at various environmental protections. Among these changes, the regulations concerning the reduction of CO2 emissions from trucks are under scrutiny. This could have serious implications for the trucking industry, as the U.S. market represents a crucial segment for Daimler Truck.

Daimler has invested heavily in developing emissions-free vehicles, anticipating a growing demand for cleaner options as regulations tighten. However, analysts now believe that the potential repeal of these upcoming regulations, set to take effect in 2027, could negatively impact truck sales in the near term. The expectation had been for a surge in demand for conventional trucks as buyers might opt for cheaper, traditional models as emissions-free trucks come with a higher price tag.

Analysts, including Pal Skirta from Metzler Bank, have noted that the market now anticipates a decrease in demand as the likelihood of stricter regulations being implemented diminishes. With Daimler holding a significant 40% market share in the heavy-duty truck segment, the company may face substantial challenges if these regulatory changes proceed as indicated.

This situation highlights the ongoing tension between regulatory frameworks aimed at reducing emissions and the economic realities facing manufacturers and consumers in the vehicle market. As the U.S. government moves forward with its deregulatory agenda, companies like Daimler will need to adapt to the shifting landscape while balancing their environmental commitments with market demands.