Propane Fleet Registrations Up 3%, Service Vehicles Lead Growth

How much does propane fueling infrastructure cost to build on-site?

Propane vehicle registrations climbed 3% between 2024 and 2025, driven by service fleets that increased registrations 7.5% year over year. School bus registrations — historically propane's largest segment — fell 7% over the same period. Seventy-six percent of propane users fuel via private on-site infrastructure and report prices from $1.32 to $2.91 per gasoline-gallon equivalent, a 19 to 63% savings over gasoline. Building on-site propane fueling infrastructure is one of the least capital-intensive investments among alternative fuel types, and a new fueling operation can be set up in as little as a day.

Current propane vehicle registrations include light- and medium-duty Ford pickups and chassis, box trucks, utility trucks, construction fleets, and rail industry applications. Forty-one percent of operators using propane intend to increase its use in their fleet.

What is renewable propane and how many fleets use it?

Thirty-two percent of fleets using propane vehicles report renewable propane as their fueling source. Those fleets report using renewable propane for 83% of their propane volume. Renewable propane is produced from biomass feedstocks and offers a lower-carbon alternative to conventional propane, similar to renewable diesel and renewable natural gas.

Did medium- and heavy-duty EV registrations grow in 2025?

Medium- and heavy-duty EV registrations increased 21% from 2024 to 2025, despite the expiration of the $7,500 federal EV tax credit in September 2025. Evidence points to buyers pulling EV purchases forward to take advantage of the credit before it expired — Q4 EV sales fell rapidly after the credit ended. With federal funding gone, fleets are faced with total cost of ownership making sense in the here and now on first-generation equipment. Removing funding opportunities has put more customers on the sideline when they were ready to enter the EV market.

OEMs took the non-renewal of federal incentives to heart and canceled or paused EV programs indefinitely. Including pickups, the total number of medium-duty EV models fell from 62 in 2024 to 33 in 2025.

Which Class 8 EV segment saw growth in 2025?

The yard tractor segment experienced BEV growth in 2025, led by Orange EV's yard tractors. Lazer Logistics, North America's largest outsourced yard management provider, surpassed 2.5 million zero-emission miles with its Orange EV yard tractor fleet and reported over $5 million in fuel and maintenance savings, with some customer sites achieving ROI in under two weeks.

What happened to hydrogen vehicle registrations in 2025?

Hydrogen vehicle registrations declined 12% from 2024 to 2025 after hydrogen's nearly $8 billion in funding was cut. Hydrogen transit bus registrations increased 24% year over year, but only 12% of all hydrogen-powered vehicle fleets intend to increase their use of hydrogen over the next two years.

Fleets using hydrogen report prices at an average of $18.86 per kilogram in 2025. The price of hydrogen fuel had an 89–135% premium over diesel. While hydrogen is more efficient than diesel, the efficiency gained does not cancel out hydrogen's higher price.

Manufacturers are still developing hydrogen-fueled powertrains. Toyota recently partnered with Daimler and Volvo in their joint venture, Cellcentric, a fuel cell company with a mission to become a leading global manufacturer of fuel cells. With private investments into hydrogen R&D, there could still be a future for the fuel. The evaluation conducted with the NACFE Run on Less project along with the Hyundai vehicle was successful, demonstrating that a hydrogen powertrain can work despite other challenges that have to be figured out.

How are fleets using AI for maintenance and operations?

Nearly half of survey respondents (48%) indicate that they use AI for daily responsibilities. In fleets, AI is most popularly used in route planning and dispatch (21%), maintenance diagnostics (19%), and preventive maintenance management (19%). While nearly half of respondents use AI for their responsibilities, they estimate that only 20% of their fleets have been enabled by AI, and 49% said that none of their fleet had been enabled by AI. This could indicate that AI is active behind the scenes, embedded in hardware and software.

Penske conducted a survey of company leadership and found that roughly 40% of fleets using AI for route optimization reported 50% savings in fuel costs, operational expenses, and distance traveled. Trucking technology companies have integrated AI directly into their software and embedded conversationally driven features into their customer-facing dashboards, enabling fleet managers to quickly ask questions like "Which vehicles need maintenance this month?" and receive answers instantly.

What this means for small fleets

Propane's low infrastructure cost and quick setup time make it the most accessible alternative fuel for small fleets with on-site fueling capability. The 19–63% savings over gasoline and availability of renewable propane at 32% of current users position it as a practical diesel alternative for service and utility applications. EV adoption will depend on first-generation TCO without federal subsidies — yard tractors have demonstrated sub-two-week ROI in high-utilization applications, but over-the-road Class 8 EV programs remain paused. Hydrogen remains cost-prohibitive at $18.86/kg with an 89–135% premium over diesel. AI-driven maintenance diagnostics and route optimization are delivering measurable savings for fleets that have integrated the technology, but adoption remains uneven across the industry.