How do the pigs explain the knacker's truck? Do the animals believe them?

They tell the animals he bought the truck from the horse slaughterers. No, they're horrified, but they do nothing regardless of what they believe or feel.

It had come to his knowledge, he said, that a foolish and wicked rumour had been circulated at the time of Boxer's removal. Some of the animals had noticed that the van which took Boxer away was marked "Horse Slaughterer," and had actually jumped to the conclusion that Boxer was being sent to the knacker's. It was almost unbelievable, said Squealer, that any animal could be so stupid. Surely, he cried indignantly, whisking his tail and skipping from side to side, surely they knew their beloved

Leader, Comrade Napoleon, better than that? But the explanation was really very simple. The van had previously been the property of the knacker, and had been bought by the veterinary surgeon, who had not yet painted the old name out. That was how the mistake had arisen.

The animals were enormously relieved to hear this. And when Squealer went on to give further graphic details of Boxer's death-bed, the admirable care he had received, and the expensive medicines for which Napoleon had paid without a thought as to the cost, their last doubts disappeared and the sorrow that they felt for their comrade's death was tempered by the thought that at least he had died happy.