An Industry at a Crossroads

The commercial vehicle industry is undergoing one of the most fundamental transformations in its history. Where heavy commercial vehicle (HCV) OEMs once operated in a relatively stable, margin-rich B2B environment fuelled by diesel-based technologies, long product cycles, and strong customer loyalty, they now face a perfect storm of technological disruption, regulatory change, and strategic ambiguity.

Two major uncertainties have the potential to reshape the industry:

• The transition to zero-emission transport is putting pressure on traditional powertrain strategies and accelerating platform innovation.
• The emergence of usage-based ownership models, such as Truck-as-a-Service (TaaS), is changing the way value is created and delivered.

Together, these dynamics are forcing OEMs to rethink their product portfolios, operating models, and long-term competitiveness.

Four Strategic Scenarios – One Uncertain Future

In order to help OEMs prepare for this uncertain future, the report introduces four strategic market scenarios projected for 2035. These scenarios are defined by two factors: product complexity (customised vs. standardised) and ownership model (traditional vs. service-based):

Scenario 1: High complexity & Truck-as-a-Service

Trucks remain highly specialised for a variety of applications and drivetrains (ICE, BEV, FCEV). However, ownership is shifting towards OEMs or fleet service providers who offer flexible, bundled solutions. While this model creates recurring revenue streams, it requires significant investment in fleet management, digital infrastructure, and risk control.

Scenario 2: Standardisation & Truck-as-a-Service

Fleets are becoming highly modular and largely electric. They are managed through algorithm-based platforms under subscription models. OEMs will focus on uptime, energy optimisation, and digital integration. The emphasis is shifting from selling trucks to managing fleets.

Scenario 3: High complexity & Traditional ownership

This scenario resembles today’s status quo. Trucks can still be customisable, and ownership remains with transport companies. However, OEMs must support multiple propulsion systems and configurations, which leads to high R&D and operational costs  – without the financial advantages of service-based models.

Scenario 4: Standardisation & Traditional ownership

Electrification dominates, and product platforms are streamlined. Haulage firms continue to own their fleets. Although aftersales revenue models must adapt to simpler vehicle designs, OEMs benefit from manufacturing efficiency, predictable lifecycle costs, and scalability.

Each scenario presents its own risks and opportunities. The challenge for OEMs is to remain agile – making strategic decisions despite the uncertainty of which future will dominate.

Value Chain Transformation Across Scenarios

These four futures scenarios require OEMs to fundamentally rethink their entire value chain. The report evaluates the scenario-specific impacts across six core value streams:

Research & Development

High-complexity scenarios require the simultaneous development of multiple platforms and drivetrains, which puts significant strain on R&D budgets and talent pools. Standardisation enables more targeted R&D investment and faster innovation cycles.

Procurement

Customised fleets reduce economies of scale and complicate sourcing. Standardised platforms, on the other hand, offer opportunities to consolidate supplier relationships, reduce costs, and mitigate inbound logistics risks.

Manufacturing & Logistics

Production systems must become more flexible in order to accommodate both fluctuating demand and mixed propulsion systems. Standardised TaaS fleets allow for near-continuous production with optimised factory layouts and reduced inventory overheads.

Captive Finance & Packages

In TaaS models, OEMs are responsible for financing and retaining ownership of large vehicle fleets. This requires strong capabilities in leasing, risk modelling, tracking residual values, and monetising assets – functions that are not fully developed in many current OEM organisations.

Sales & Distribution

Traditional vehicle sales give way to long-term service contracts and consultative selling. OEMs must engage with customers digitally, bundle services with vehicles, and provide flexible financing models.

Aftersales & Digital Solutions

Electrification reduces revenue from mechanical services. OEMs must therefore compensate for this by offering predictive maintenance, uptime guarantees, over-the-air updates, and analytics platforms – especially in TaaS models where operational continuity is critical.

The Financial Realities of Transformation

From a financial perspective, the implications of these scenarios are significant. The High complexity & TaaS model is the most capital-intensive, requiring investment in multiple technologies, digital platforms, fleet ownership, and service ecosystems – all while dealing with high asset depreciation and tied-up working capital.

While the Standardisation & TaaS scenario is still capital-heavy, it is more scalable. OEMs benefit from volume-based production, predictable residual values, and recurring subscription revenue. However, cash flow in the early stages remains under pressure due to the need for upfront investments in electrification and software development. By contrast, traditional ownership models – particularly the standardised one – are more conservative. Capital commitment is lower, but so is the potential for service-based recurring revenue. These models rely more on maintaining gross margins through production efficiency and product differentiation.

In any scenario, reducing costs, optimising the footprint and consolidating the platform are essential to free up capital to fund the transition.

No-Regret Strategic Moves for All Future Scenarios

Although the future is uncertain, there are six 'no-regret' actions that OEMs should take, regardless of which scenario becomes dominant:

Summary

The next decade will be a defining period for truck OEMs. While the final outcome is unclear, the direction of change is certain. Electrification, digitalisation, and service transformation are changing the rules of the game. OEMs that act now – building core capabilities while retaining strategic flexibility – will be best placed to lead in a redefined commercial vehicle landscape.

For more information, download the full report “The Future of the Commercial Vehicle Market and the Need for OEMs to Act” here, or connect with us to discuss implications for your strategy.