Traton AG: Early Recovery Signals Emerge in Commercial Vehicle Sector as EV Momentum Accelerates

The commercial vehicle sector has long been a barometer of global economic health, and 2025 is shaping up to be a pivotal year for Traton AG. While the company's traditional unit sales remain under pressure, a surge in electric vehicle (EV) adoption and improving order intake in key markets suggest early signs of a recovery. For investors, this divergence between legacy segments and electrification progress presents both risks and opportunities.

Mixed Sales, Strong EV Growth

Traton's Q2 2025 results were a mixed bag. Total unit sales rose 1% year-over-year to 80,000 vehicles, but the first half of 2025 saw a 4% decline in sales to 153,100 units compared to 160,100 in H1 2024. Regional headwinds, particularly in Brazil and the U.S., continue to weigh on performance. Scania Vehicles & Services, for instance, saw a 5% decline in Q2 sales due to Brazil's high inflation and dealer stockpiles, while International Motors (Traton's North American arm) faced uncertainty over U.S. import tariffs.

Yet, the EV segment tells a different story. Traton sold 630 all-electric vehicles in Q2 2025, a 117% year-over-year jump. For the first half of 2025, EV sales totaled 1,250 units, more than double the 610 units sold in H1 2024. MAN Truck & Bus led the charge, with 430 EVs sold in Q2 alone—a 318% increase—while Scania added 120 units. These figures underscore Traton's strategic shift toward electrification, particularly in Europe, where regulatory pressure and customer demand for zero-emission fleets are intensifying.

Order Intake as a Leading Indicator

Traton's order intake in Q2 2025 offers a glimmer of optimism. While the first half of 2025 saw a 4% decline in total sales, incoming orders rose 12% year-on-year, and the book-to-bill ratio hit 1.0. This balance between orders and deliveries suggests that the company is managing to convert demand into revenue, a critical step for stabilizing its business.

The recovery is not uniform. MAN's Q2 sales rebounded 28% quarter-on-quarter after a 14% drop in Q1, driven by renewed fleet investment in Germany. Meanwhile, Volkswagen Truck & Bus (VWTB) grew half-year sales by 6% despite a 4% Q2 decline, aided by a strong opening quarter. These regional variations highlight Traton's exposure to fragmented market dynamics but also point to pockets of resilience.

EVs as a Strategic Lifeline

The commercial vehicle industry is at a crossroads, and Traton's EV performance positions it to benefit from the long-term transition to sustainable transport. MAN's 318% growth in EV sales and Scania's 89% increase are not just numbers—they reflect a fundamental shift in customer priorities. Fleets in Europe, particularly in logistics and public transport, are accelerating their adoption of electric trucks and buses to meet decarbonization targets.

However, challenges persist. International Motors' EV sales dipped 21% in Q2, and VWTB sold zero all-electric vehicles in the quarter. These setbacks underscore the uneven pace of electrification in North America and Brazil, where infrastructure, cost, and regulatory support lag behind Europe. Yet, Traton's China plant, set to open in October 2025, could become a growth engine. With a projected 1,000 EV units in 2025 and 10,000 by 2026, the company is betting on Asia's emerging EV market.

Navigating Geopolitical and Economic Risks

Traton's path to recovery is not without hurdles. U.S. import tariffs and economic uncertainty continue to dampen North American demand, while Brazil's inflationary environment strains Scania's operations. The company has adjusted its 2025 full-year outlook, now anticipating unit sales to fall between -10% and 0%, down from previous guidance.

Yet, Traton's leadership remains cautiously optimistic. CEO Christian Levin highlighted “improved incoming orders” and a “strong order backlog,” particularly in EVs. The company's China plant, which has already invested €2 billion in capex and R&D, is a testament to its long-term vision.

Investment Implications

For investors, Traton's dual narrative—declining traditional sales and surging EV growth—demands a nuanced approach. The company's EV segment is a high-growth opportunity, but its reliance on volatile markets like Brazil and the U.S. adds risk. Here's what to watch:

1. EV Adoption Rates: Traton's EV sales must continue to outpace traditional segments to offset revenue declines. The will be critical.
2. China Plant Output: The October 2025 opening of Traton's China plant could boost unit sales and diversify its revenue base. Investors should monitor .
3. Tariff and Currency Exposure: Traton's U.S. and Brazilian operations are sensitive to policy shifts. A could highlight risk exposure.

Conclusion: A Tipping Point for Traton

Traton AG is navigating a complex landscape, but the data suggests it is at a turning point. The company's EV growth, coupled with improving order intake in Europe, points to a potential inflection in the commercial vehicle sector. While macroeconomic risks remain, Traton's strategic investments in electrification and global expansion position it to capitalize on the long-term shift toward sustainable transport. For investors with a medium-term horizon, the key will be balancing the near-term challenges with the promise of a greener, electrified future.