Fleet Management Trends: 2025 Q1 Report
March 27, 2025
The first quarter of 2025 has been characterized by complexity and disruption. The proposed tariff policies in the United States have added a layer of uncertainty to trade and fleet operations, shaking up everything from cross-border logistics to operational efficiency and potentially increasing overall costs. For those involved in fleet management, it’s a reminder of just how important it is to stay informed and ready to adapt. Agile decision-making can make all the difference in reducing risks and preparing for potential policy changes.
This report explores three key trends shaping fleet management industry trends in Q1 2025—economics, acquisitions, and sustainability. We’ll break down what’s driving these big industry shifts, whether it’s changing costs, market consolidation, or the growing push for decarbonization. By tapping into these insights, fleet leaders can position themselves to not just weather disruptions but thrive in what’s shaping up to be an unpredictable, fast-moving year. Think of this as your roadmap to staying ahead in a rapidly evolving market.
Economics and tariffs
From potentially higher vehicle prices to rising repair costs, nearly every aspect of fleet operations could be affected by tariffs.
Nearly all aspects of fleet management will be affected
Some of the most significant impacts of the proposed tariffs will be felt in:
- Vehicle acquisition: Both imported and domestically produced vehicles will become more expensive, as many parts and components are sourced internationally.
- Maintenance costs: Tariffs will impact all areas of fleet maintenance, including tire changes, preventative maintenance, and repairs, leading to higher overall costs.
- Fleet budgets: Tariffs could inflate fleet budgets, making it harder to stay on track and requiring more frequent adjustments.
And then there’s the ripple effect—increased vehicle tariffs also impact leasing rates and resale values. While resale markets are expected to rise, the uncertainty created by these changes makes long-term planning even trickier.
Impact on fuel
Recently, we have seen a steady decline in fuel prices in the United States, with the average cost of a gallon of regular gas hitting $3.07 on March 13. This price saw a slight uptick, reaching $3.10 on March 20. In Canada, the nationwide average rose to $1.588 per litre on March 20, up from $1.548 on March 13.
A proactive approach is required
So, what can fleet managers do in such a challenging environment? Staying proactive is an important first step. Continuously monitor tariff changes and fleet management industry trends to avoid being caught off guard. Review your budgets regularly—they might need some tweaking to stay on track.
A proactive approach should also entail:
- Exploring alternative sourcing options.
- Renegotiating contracts with suppliers.
- Staying on schedule with vehicle replacements as newer vehicles often means better fuel efficiency and lower fleet maintenance costs.
- Investing in battery electric or fuel-efficient vehicles, provided they don’t come with significantly higher costs.
- Communicating with your finance department to understand the impending impact of tariffs.
It’s all about planning and staying adaptable. With a little creativity and forward-thinking, fleet managers can navigate these challenges and keep operations running smoothly.
Fleet vehicle acquisitions
Q1 is spotlighting a big challenge for fleet managers—finding the right balance between expanding supplier networks and planning vehicle fleet management replacements. This balance is critical for ensuring resilience, cost-effectiveness, and operational efficiency.
Supply chain challenges
The past few years have been a wake-up call for anyone dealing with supply chains. Relying too much on a single supplier is risky, as geopolitical issues, natural disasters, or unexpected global events can throw everything off track.
According to McKinsey, nearly all companies have dealt with serious supply chain disruptions recently, and 49% admit they’ve faced significant planning headaches. Those who relied on just one supplier took bigger hits, with longer recovery times and higher costs.
Diversify suppliers
You’ll want to actively build and maintain relationships with multiple suppliers to ensure continuity and unlock other tangible benefits. It can lead to better pricing and contract flexibility as suppliers compete for your business. Plus, you’ll be able to compare offerings and get the best value.
Strategic vehicle replacement planning
In today’s climate of rising costs and inflation, planning your fleet’s vehicle replacements isn’t just smart—it’s essential. Hanging on to aging vehicles might seem like a way to save, but it often results in unexpected breakdowns, downtime, and increasing fleet maintenance bills.
Keeping older vehicles in service longer than planned can lead to rising maintenance costs and operational inefficiencies, including unexpected breakdowns and downtime. These challenges and the potential need for temporary rentals can strain your resources, making strategic replacement planning essential to control expenses and keep your fleet running smoothly.
As mentioned above, tariffs are expected to cause vehicle shortages and drive-up prices, so planning ahead is important. With a thorough, data-driven replacement strategy, fleet managers can avoid disruptions.
Track fleet data closely
Keep an eye on key metrics like mileage, fuel efficiency, and repair costs to spot vehicles that are becoming too costly. An optimal replacement policy as a guidepost can help fleet managers identify which vehicles are due—or will soon be due—for replacement. This approach ensures decisions are data-driven and aligned with long-term cost efficiency.
Then, weigh the upfront cost of a new vehicle against the growing expenses of downtime, maintenance, and future replacement. It’s all about making smarter moves for your fleet and staying ahead of potential disruptions.
Sustainability
Electric vehicle (EV) market holding steady
The EV market has been growing for the last few years. However, according to J.D. Power, market share is projected to hold steady at 9.1% in 2025. This indicates a solid foundation for future growth. Additionally, fleets with robust corporate sustainability initiatives are expected to see continued growth in EV adoption beyond this baseline.
For those not yet ready to fully transition to electrification, there's positive momentum towards hybrids as a step in that direction. Hybrids offer a viable solution to help fleets start the transition.
Interest in alternative fuel vehicles rising
Alternative fuel vehicles such as compressed natural gas (CNG) and hydrogen-powered vehicles are emerging as additional decarbonization options.
CNG vehicles produce fewer greenhouse gas emissions than traditional internal combustion engine (ICE) vehicles and are especially appealing in areas with a strong natural gas infrastructure. The market for CNG vehicles is booming, with current revenue at $110.5 billion, and it’s forecasted to grow to over $300 billion by 2033.
Hydrogen-powered vehicles offer another path toward lower-carbon fleets. It is important to keep in mind that while there is significant projected growth for both CNG and hydrogen-powered vehicles, they are both currently at a very early adoption stage for most commercial fleets.
Evaluate all your decarbonization options
Hitting carbon emissions reduction targets starts with finding the right decarbonization strategies for your fleet.
This could mean:
- Adopting hybrids to balance fuel efficiency with performance. This offers a pragmatic step toward reducing emissions without complete reliance on charging infrastructure. It is seen as a viable option for many light-duty fleets.
- Adding idle-reduction technologies to improve internal combustion engine (ICE) vehicle efficiency.
- Switching to EVs, though infrastructure and supply constraints are slowing adoption in some areas.
- Exploring alternative fuels like biodiesel, hydrogen, or renewable natural gas.
Optimizing fleet utilization also plays a key role. Consolidating underutilized assets and ensuring vehicles are used effectively can improve efficiency by reducing costs, fuel use, and emissions.
The best solution depends on your fleet’s makeup, vehicle use, and operational needs.
Contact us
Element’s Strategic Advisory Services can help guide you through these uncertain times with trusted expertise. Get in touch with us to learn more.
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