PACCAR (NASDAQ:PCAR) executives used the company’s 2026 Investor Conference to emphasize what management described as improved “cycle-over-cycle” financial performance, a growing contribution from parts and financial services, and ongoing investments in manufacturing flexibility and technology. Presentations and Q&A covered product launches across Kenworth, Peterbilt, and DAF; regulatory and powertrain strategy; aftermarket growth priorities; and 2026 outlook and capital deployment plans.
Management highlights structural changes in profitability
Chief Executive Officer Preston Feight said PACCAR is “structurally stronger,” comparing performance in 2014 and 2025—years he said featured similar truck volumes. He cited revenue growth from $19 billion to over $28 billion, income rising from $1.4 billion to $2.6 billion, and return on revenue increasing from 7.2% to 9.3%. Feight also said the parts and financial services businesses have grown from 43% of profit to 71%, which he said helps dampen cyclicality.
Investment and technology themes: manufacturing flexibility, AI, and “local-for-local”
Feight said PACCAR invested over $5 billion over the past five years in facilities and products, including flexible manufacturing, new parts distribution centers, clean combustion engines, connected vehicle solutions, an autonomous truck platform, and zero-emissions vehicles.
Senior Vice President Laura Bloch described PACCAR’s “advanced manufacturing strategy” and said the company deployed $800 million over the past five years to increase operational flexibility across its manufacturing footprint. She said investments over the past three years increased capacity by 17%, and cited deployment of Industry 5.0 and Vision AI tools to improve efficiency and flexibility.
Bloch also discussed tariff-related manufacturing shifts, saying PACCAR has moved to a “build local-for-local” strategy in North America. She said medium-duty trucks previously built in Sainte-Thérèse, Canada, have been moved to Kenworth’s Chillicothe facility and Peterbilt’s Denton plant, and that low cab forward refuse trucks previously built in Mexico for the U.S. are now produced in Denton. Bloch said PACCAR expects “more than 50% relief” on tariff exposure through a tariff offset program and believes Section 232 changes enhance the value of its manufacturing footprint.
Executives repeatedly referenced expanded use of AI, including AI-driven specification tools, vision-based quality checks, end-of-line scanning to verify installed content, and parts inventory optimization.
Products and market share: new models and regional goals
Bloch reviewed product updates across brands. For Kenworth, she highlighted the recently launched T880S high horsepower vocational model, which she said features enhanced cooling capacity and styling aimed at heavy haul, wrecker, and dump applications. For Peterbilt, she said the brand began delivering the Model 589 based on the latest cab platform and described it as an aspirational model for the owner-operator market, adding that Peterbilt has produced over 12,589 units since launch. She also said Denton now produces all Peterbilt truck models for the U.S. market and noted the Model 567 EV as the industry’s first electric vocational-specific truck.
On DAF, Bloch described a broadened lineup and said DAF’s new XD and XF electric trucks won the International Truck of the Year award, calling it the third win in five years.
Bloch presented PACCAR’s heavy-duty market share trends across regions, stating:
- South America: share grew from under 3% early in the period to 7.7% in 2025, which she linked to the opening of DAF Brazil.
- Australia: share increased from 24% in 2005 to 27.7% in 2025.
- North America: combined share rose from 24% in 2005 to 30.4% in 2025.
She said PACCAR’s approach is “profitable growth” and noted PACCAR’s 2024 record ROIC of 55.5% referenced earlier by Feight.
Powertrain and regulation: diesel remains core, new engines for 2027 NOx
Chief Technology Officer John Rich said PACCAR’s development model emphasizes committing resources when volumes are high and technology is stable, partnering selectively in areas with uncertainty, and buying where volumes are low or risk is high. He said PACCAR’s powertrain strategy remains consistent: clean internal combustion engines remain core, hybrids will complement proprietary engines over time, battery electric trucks are a pragmatic solution in appropriate use cases, and PACCAR is investigating hydrogen options but has not committed capital to hydrogen fuel cells or hydrogen combustion.
Rich said there is “no delay” in the U.S. 35 mg NOx standard for 2027, though the EPA “may relax requirements around warranty and full useful life,” with more expected by the end of March. He said the elimination of Greenhouse Gas Phase III and California’s unique programs for NOx and zero-emission vehicles would not affect 2027 NOx, characterizing that development as “purely a greenhouse gas play.” In Europe, he said regulations remain stable, with Euro 7 NOx requirements in 2029 and a greenhouse gas step-change in 2030.
To meet the U.S. 35 mg NOx mandate, Rich said PACCAR will introduce two all-new proprietary engine platforms, calling them the most advanced powertrains in the company’s history and saying they are in the final development phase. He also said new engines are expected to meet NHTSA’s final mile-per-gallon step in 2027 without requiring electrification.
Parts and financial services: expanding share, targeting second owners
President Kevin Baney outlined a parts growth strategy centered on what he called a $70 billion combined addressable retail parts market: $45 billion in North America (PACCAR at 15% share) and $25 billion in Europe and other markets where PACCAR operates (13% share). He said gaining 5 percentage points over five years would equate to $3.5 billion of incremental dealer retail parts sales by the end of 2030.
Baney described three pillars for parts growth—ease of doing business, product segmentation, and AI-driven technology—and cited operational metrics including 21 parts distribution centers (31% growth over 10 years), 2,400 dealer and TRP locations (33% growth), 99.9% shipping accuracy, 70% of shipments arriving within 24 hours, and Managed Dealer Inventory auto-accept rising from 42% five years ago to 92%.
He also emphasized opportunity with second owners in North America, where he said the $45 billion market splits into $12 billion for first owners and $33 billion for second owners. Baney said first owners typically operate trucks in years 1–4 and spend about $8,000 per truck annually on parts, while second owners operate trucks in years 5–12 and spend about $12,000 per truck annually. He said PACCAR has 21% share with first owners and 13% share with second owners, framing the second-owner segment as the larger growth opportunity. In the Q&A, Baney said his “mental math” for the $3.5 billion incremental opportunity assumed roughly a 60/40 split toward first owners versus second owners, while also pointing to “over 380,000” PACCAR engines operating in trucks past year five as a service and parts opportunity.
On PACCAR Financial Services, Baney said the business operates in 26 countries and provides captive financing that supports truck market share, along with dealer inventory financing and expansion loans. He said PACCAR Financial Services has delivered superior return on assets versus peers, citing an average ROA of 2.6% over the past five years and saying PACCAR’s ROA last year was 47% higher than the peer group average.
2026 outlook and capital allocation
CFO Brice Poplawski reviewed PACCAR’s 2025 results, including revenue of $28.4 billion, adjusted net income of $2.6 billion, and 144,200 trucks delivered. He also highlighted PACCAR’s record of 87 consecutive years of net income and 85 consecutive years of paying a dividend. Poplawski said the company has increased its regular quarterly dividend by an average of 8% per year over the last decade and that total dividends declared in 2025 were $2.72 per share, totaling $1.4 billion.
Poplawski reaffirmed PACCAR’s outlook for first quarter and full-year 2026, stating it was unchanged from the company’s first-quarter earnings call “a couple of weeks ago.” Guidance included first-quarter deliveries of around 33,000 units with gross margins in the 12.5%–13% range; parts sales growth of 2%–4% in the quarter and 4%–8% for the full year; 2026 capital expenditures of $725 million–$775 million; and R&D spending of $450 million–$500 million. He also cited expected 2026 industry market sizes of 230,000–270,000 units in the U.S. and Canada and 280,000–320,000 units in Europe.
In Q&A, management discussed uncertainty tied to competitor pricing actions, the possibility of a regulatory “pre-buy,” and the relationship between premium pricing and installed base growth. Executives said PACCAR aims to balance share and margin over time and reiterated that fuel economy remains a central customer value driver regardless of changes to greenhouse-gas-related regulation.
About PACCAR (NASDAQ:PCAR)
PACCAR Inc is a global technology leader in the design, manufacture and customer support of light-, medium- and heavy-duty commercial vehicles. The company’s products are marketed under well-known brand names including Kenworth, Peterbilt and DAF and span vocational and long-haul applications. PACCAR’s core business includes vehicle engineering and assembly as well as the supply of components and proprietary powertrain systems designed to meet regulatory and customer performance requirements.
In addition to truck manufacturing, PACCAR operates a comprehensive aftermarket parts business, distributes used trucks and provides commercial vehicle financing and leasing through its financial services operations.
