Daimler Deepens Diesel Engine Focus, Boosts Investment
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Daimler Truck executives signaled a renewed focus on diesel powertrains at the company’s Capital Market Day 2025.
Senior leaders at the world’s biggest truck maker, including Daimler Truck North America CEO John O’Leary, told analysts and investors the company was pumping the brakes on investment in alternative powertrains, particularly in North America.
Epitomized by one of the five pillars of the parent company’s “Stronger 2030” strategic overhaul termed “transform at the speed of right,” Daimler Truck is downshifting its battery-electric and hydrogen fuel cell undertakings while accelerating diesel powertrain investment.
“With market maturity for zero-emissions vehicles losing momentum in North America, we’ve reshaped our capital allocation strategy to refocus on further developing our internal combustion technology,” O’Leary said during a speech at the event.
“This is a great example of where DTNA moves at the speed of right: Where it makes sense, when it makes sense and always in alignment with customer readiness, infrastructure maturity and regulatory timelines,” said O’Leary.
DTNA CEO John O'Leary said the company refocusing on the internal combustion engine makes sense because of the condition of the market. (DTNA)
A cross section of U.S. industry stakeholders, including , has argued for some years that the infrastructure is not widely available enough for a transition away from diesel.
In addition, with no end in sight for ongoing freight market weakness, rolling stock that doesn’t have a traditional internal combustion engine is seen by many as too pricey for all but the deepest-pocketed carriers.
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Criticism of truck makers’ enthusiasm for alternative powertrains has been fierce, including from the Trump administration.
O’Leary conceded at CMD that diesel remains the most viable solution in the vast majority of heavy-duty applications in North America.
“Our diesel strategy remains a top priority for sustaining our market lead,” he said, noting that 90% of Western Star and Freightliner on-highway trucks have in-house engines.
Freightliner held a 36.6% Class 8 retail market share through the first five months of 2025, more than double the share of its nearest rival, according to Wards Intelligence data.
O’Leary told investors DTNA would focus on a three-pronged approach: scale, sustain and streamline.
“We sustain what works,” he said, including processes and technologies that “consistently deliver value.”
One example is enabling flexible diesel and zero-emission truck production, he said, ensuring DTNA can meet customer demand across technologies without compromising efficiency.
DTNA's Cleveland Truck Plant in North Carolina. It has increased production of Western Star trucks. (DTNA)
As a result of the increase in vocational orders and sales, DTNA completely inverted manufacturing at the Cleveland Truck Plant — the company’s largest in North America — to produce more Western Star trucks, said O’Leary, even as Freightliner prepared for the September launch of the fifth-generation Cascadia tractor.
MORE: Freightliner Opens Fifth-Generation Cascadia Order Book
Initially, engine options for the tractor are Detroit DD13 and DD15 power plants. However, starting in 2026, Cascadias will be available with Cummins’ X15 diesel and X15N natural gas-powered engines — seen as an inflection point for renewable natural gas.
Western Star only offers trucks with diesel engines. Western Star launched the X Series in 2020: the 47X, 49X and 57X.
In 2024, 85% of the Cleveland plant’s Class 8 output was Western Star trucks.
Western Star sold 11,612 trucks on a retail basis in 2024, up 39.5% year over year, according to Wards data. The division’s Class 8 market share rose to 4.8% in 2024 from 3.1% in 2023. Sales through the first five months of 2025 totaled 4,756, an increase of 9.6% year on year. That equated to a 5.4% market share, or exactly double the year-ago period’s slice of the Class 8 retail pie.
Truck cabs being manufactured at the plant in Cleveland, N.C. (DTNA)
“We see a momentum increase in diesel. We see a momentum decrease for zero-emissions, [especially in North America],” Daimler Truck Head of Truck Technology Andreas Gorbach told investors in the presentation following O’Leary’s.
“The global diesel ramp down is not in sight, as of today,” said Gorbach. “And we are ready to meet this development with the next evolution.”
Production of the next engine development will start in 2026, and there will be major efficiency developments, he said, adding: “And we are already thinking beyond that. We will ensure the long-term competitiveness well beyond 2030.”
DTNA’s Detroit Diesel produces three main heavy-duty truck engines: the DD13, DD15 and DD16. All are based on Daimler Truck’s companywide heavy-duty diesel platform (HDEP).
HDEP was established in 2007. Around 50-60% of parts are common to engines across the Mercedes-Benz Trucks and DTNA longhaul ranges, O’Leary told Transport Topics on the sidelines of CMD.
One engine platform offers global supply chain scale. It is customized for specific markets. In the U.S., trucks run a lot faster and pull bigger loads, DTNA’s top executive said, adding that the EU is mostly a 13-liter market and the U.S. is mostly a 15-liter market.
The platform has been upgraded two or three times since it was launched. Such projects have a price tag in the billions, O’Leary said. Platforms can last decades, but there is continual renewal, he noted.
“Today, Detroit is the market share [leader] in 13-liter and larger engines, and we’re in contention for the No. 2 spot in the heavy-duty vocational segment — an impressive leap from where we had been for a long time. This momentum is no accident. It’s the result of sustained focus on engineering excellence, customer value and strategic investment,” O’Leary told investors.
Daimler Truck CEO Karin Radstrom touted the company's stature in the heavy-duty diesel market. (DTNA)
Daimler Truck CEO Karin Radstrom added: “We are the heavy-duty diesel champ!”
DTNA plans to increase its diesel investment, O’Leary told bankers and analysts, although he declined to say by how much when asked by TT.
“The 2027 Detroit engine portfolio is more than a product, it’s a strategic advantage that we’ll continue to defend,” he said, adding: “This platform reflects everything we’ve [learned] from decades of leadership and everything we’re building toward. It’s a powerful statement of our sustained commitment to internal combustion excellence, even as we continue to develop zero-emission technologies at the global scale.”
Meanwhile, Daimler Truck and DTNA are set to slow the pace of investment in battery-electric truck development and production and hydrogen fuel cell truck development.
Large-scale fuel cell industrialization and serial production of hydrogen-powered trucks, Daimler Truck announced, would be pushed back to the early 2030s, a change from the end of the current decade. Daimler Truck is planning to launch hydrogen fuel trucks in Europe only at that time, not North America.
DTNA offers two battery-electric trucks: an electric version of the top-selling tractor in North America, the eCascadia, and the eM2, a medium-duty Classes 6 and 7 straight truck.
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