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The second quarter of 2026 presented fleet leaders with a complex operating environment shaped by rising maintenance costs, fuel price volatility, and uncertainty around model year 2027 vehicle acquisitions. As aging vehicles, technician shortages, and longer repair timelines drive up operating expenses, many organizations are reassessing replacement strategies and total cost of ownership. At the same time, hybrids continue to gain momentum as fleets seek practical ways to improve fuel efficiency and support sustainability goals without the infrastructure challenges associated with full electrification. These trends reinforce the importance of proactive planning, lifecycle optimization, and disciplined cost management as fleets prepare for the second half of 2026.
Vehicle acquisition planning is becoming more complex, with fleet leaders navigating model year 2027 pricing uncertainty, production timing concerns, and ongoing pressure from rising vehicle costs.
Maintenance costs continue to climb due to aging vehicles, technician shortages, higher labour rates, and longer repair cycle times, making uptime a growing operational priority.
Fuel volatility has returned as a major concern, prompting organizations to strengthen fuel management programs, leverage telematics, and scrutinize fueling behaviours to control costs.
Hybrid vehicles are gaining traction as fleets look for practical solutions that reduce fuel consumption and emissions while avoiding many of the operational barriers associated with EV adoption.
Vehicle acquisition planning is becoming more complex, with fleet leaders navigating model year 2027 pricing uncertainty, production timing concerns, and ongoing pressure from rising vehicle costs.
Maintenance costs continue to climb due to aging vehicles, technician shortages, higher labour rates, and longer repair cycle times, making uptime a growing operational priority.
Fuel volatility has returned as a major concern, prompting organizations to strengthen fuel management programs, leverage telematics, and scrutinize fueling behaviours to control costs.
Hybrid vehicles are gaining traction as fleets look for practical solutions that reduce fuel consumption and emissions while avoiding many of the operational barriers associated with EV adoption.
The second quarter of 2026 has brought growing pressure across several parts of fleet operations. Maintenance costs are still rising as technician shortages, aging vehicles, and longer repair timelines make it harder to keep vehicles on the road. At the same time, teams are starting to plan for model year 2027 acquisitions with pricing, availability, and timing still uncertain. Fuel volatility is also back in focus, pushing fleets to revisit budgets and look more closely at the costs they can control. As fleets look ahead to the second half of 2026, success will depend on thoughtful planning, adaptable procurement strategies, and a continued focus on operational execution.
As spring turns to summer, fleet leaders' thoughts turn to model year planning for 2027. One of the most important factors shaping those decisions is vehicle cost. In the U.S., the April average new vehicle price was $49,461, up 1.8% from one year earlier. The looming threat of tariffs is only heightening the sense of vehicle pricing uncertainty for fleet and business leaders.
To counteract the steadily increasing vehicle prices, many fleet leaders are becoming more selective about the vehicles they bring into the fold. This means looking more closely at things like which model, what trim, what lead time, and what year-over-year price increase they are willing to absorb.
"A lot of clients are concerned about year-over-year price increases,” said Element Strategic Advisor Melissa Groves. “They're also focused on availability, not in the same way we saw during the pandemic, but around production timing and lead times for certain vehicles."
Q2 saw the continuation of fleets turning to hybrids as a way to balance rising operating costs with long-term sustainability objectives. Hybrids offer a practical path forward, helping organizations improve fuel economy and reduce emissions while avoiding many of the infrastructure and change-management challenges that continue to hamper broader EV adoption.
According to a report in the Wall Street Journal, hybrid sales increased 33% year-over-year in May of this year. During the same period, EV sales declined 25% year-to-date, highlighting a widening gap between hybrids and fully electric vehicles.
“With the increasing fuel prices as well as the need to meet sustainability goals, fleet leaders are asking us to have more hybrids in the total cost of ownership (TCO) analysis,” Element Strategic Advisor Sharlin Sebastian said.
Anyone who has ever been in charge of running a fleet can tell you that things never operate in a vacuum. One area of fleet operations has a clear and direct impact on the others. Q2 has provided a textbook example of this in the way rising maintenance costs (more on this later) are making fleet leaders reconsider how long they keep vehicles in service.
Higher labor rates, technician shortages, parts costs, and longer repair cycle times are all combining to drive up the total cost of operating aging assets. As a result, fleet managers are increasingly using replacement analyses to identify vehicles whose maintenance costs outweigh the benefits of extending their service life.
"Now is the time when a lot of us are doing replacement analysis for our clients and flagging those assets which have high maintenance or which should be replaced in the upcoming model year," Sharlin said.
What fleet leaders should do now
Begin replacement planning early and closely monitor .
Use replacement analyses to identify aging assets whose maintenance costs are outweighing their value.
Expand vehicle selector reviews to include hybrid options and updated TCO analyses.
The age of a vehicle continues to be a major contributor to maintenance spend. The average vehicle age on U.S. roads has reached a record 13 years, increasing demand for repairs and services across the industry. Older vehicles typically require more frequent repairs, spend more time out of service, and place additional pressure on already constrained service networks.
“Maintenance is one area fleets can control. Replacing older assets can help bring maintenance costs down by minimizing unscheduled big-ticket repairs," Sharlin said.
For many fleets, maintenance costs are increasingly becoming a key input into replacement planning decisions, particularly as organizations evaluate which assets can continue to operate efficiently, and which should be prioritized for replacement.
The shortage of qualified technicians remains one of the most persistent challenges facing fleet maintenance programs. According to the U.S. Bureau of Labor Statistics, the industry is expected to face approximately 70,000 annual openings for automotive service technicians and mechanics and 26,500 annual openings for diesel technicians and mechanics over the coming decade. As repair facilities compete for skilled labor, fleets are experiencing higher labor rates and increased pressure on service capacity. "Clients continue to see year-over-year increases in maintenance costs driven by technician shortages, higher labor rates, parts costs, and supply chain pressures,” Melissa said.
While rising maintenance expenses remain a concern, many fleet operators are increasingly focused on vehicle downtime. Technician shortages, parts delays, and longer repair queues are extending service timelines and reducing vehicle availability. The impact varies significantly by fleet type. While a sales vehicle can often be temporarily replaced with a rental, downtime for a specialized service vehicle can have a much greater operational impact. As a result, uptime is becoming just as important a metric as maintenance spend when evaluating fleet performance. What fleet leaders should do now
Review aging assets with high maintenance costs and frequent repairs as part of your model year 2027 replacement planning. In some cases, replacement may be a more cost-effective option than continued maintenance investment.
Factor vehicle downtime into replacement decisions, not just maintenance spend. The operational impact of keeping a vehicle off the road can be just as significant as the repair cost itself.
Stay proactive with your fleet maintenance. Keeping up on preventative maintenance and addressing flagged issues early can help reduce unexpected repairs and keep vehicles in service longer.
Any early year hopes that prices would drop significantly in Q2 were dashed as the geopolitical instability stretched on through the quarter. This forced fleet leaders to reexamine both budgets and forecasts. "When we started this year, fuel was going to decline again. Instead it took a big turn upwards, so fleet managers had to make adjustments to their budgets for it," Melissa said. The mid-June U.S.-Iran peace deal, which reopened the Strait of Hormuz, is expected to bring welcome relief at the pumps, although it may be well into Q3 before prices drop significantly. Still, the reopening has not yet restored normal shipping volumes, meaning fuel markets could remain exposed to further volatility if regional tensions flare again. In the United States, the June 15th average gas price sat at $4.065 per gallon which is down 11% from $4.528 per gallon one month prior, but still up nearly 30% from $3.136 per gallon on June 15th last year.
With no control over volatile fuel prices, fleet leaders are focusing on what they can control. That means an even sharper focus on the ways they can increase fuel efficiency across their organization.
“A lot of my clients are asking, what can we do to manage this risk? They have to give regular updates to their leadership who are looking for ways to address this," Sharlin said.
This focus to combat high fuel prices is resulting in organizations increasingly using telematics and fuel reporting tools to identify opportunities to save money. Excessive idling, inefficient routing, and aggressive driving behaviors are also receiving greater scrutiny as companies look for fuel efficiency factors within their control.
Aside from looking for ways to reduce fuel consumption (as covered above), Q2 has seen fleet leaders looking more closely at ways to reduce their spend on the fuel they do consume.
“There's more focus in terms of exception reports, like are there drivers who are fueling outside the Element network? Are there drivers who are fueling from expensive gas stations?” Sharlin said.
Many fleet managers are encouraging drivers to use preferred fueling networks and approved locations whenever possible. Even the smallest improvements in purchasing behavior can have a meaningful impact when fuel prices are higher than expected.
What fleet leaders should do now
Regularly analyze consumption, idling, exception reporting, and fueling trends to identify drivers, vehicles, or regions contributing disproportionately to fuel spend.
Consider hybrid vehicles as part of your fuel cost management strategy, as they can deliver meaningful fuel savings for fleets with compatible duty cycles while avoiding some of the infrastructure challenges associated with EV adoption, though availability may remain limited in certain service fleet segments.
Investigate which brands of gas stations are driving outsized costs and encourage drivers to use tools such as the app to find lower cost alternatives.
Looking across the key fleet management trends, the second quarter of 2026 has underscored the growing connection between operational costs and long-term planning decisions.
Rising maintenance expenses are influencing replacement strategies, planning is becoming more dependent on timing, availability, and total lifecycle cost considerations, and fuel volatility continues to place pressure on operating budgets.
As fleets prepare for the months ahead, flexibility remains essential. The organizations best positioned for the remainder of 2026 will be those that combine disciplined planning with the agility to respond as market conditions evolve.
Element's team can help you plan your next move with confidence. Get in touch to learn how our team can support your goals and help you navigate what's ahead.
Line chart showing the average new-vehicle transaction price in the U.S. rising steadily from about $31,000 in 2012 to $49,461 in 2026.
Infographic comparing average fuel prices in Canada and the United States as of June 15, 2026.