JLR’s £1.6 Billion Nightmare? US Tariffs Could Deal Crushing Blow, Warns Tata Boss

Jaguar Land Rover (JLR), the luxury carmaking arm owned of Tata Motors, is staring at a potential £1.6 billion (US 2.1 billion) setback due to the recently announced US trade tariffs. However, Tata Group Chairman N. Chandrasekaran said on Friday that the company is working swiftly to cushion the impact — bringing the net damage down to around £600 million.

Speaking at Tata Motors' 80th Annual General Meeting, Chandrasekaran pointed to international trade tensions as a key headwind for JLR.

“Tariff is a major issue, primarily for JLR,” he noted. “Without intervention, the tariff would have jumped from 2–2.5% to 27.5%. Thanks to the US-UK trade agreement, this has been reduced to 10%. Even then, the financial impact is significant — about £1.6 billion — but JLR has implemented measures that are expected to bring it down to £600 million.”

Earlier this week, JLR told analysts it expects its revenue to dip from £29 billion in FY25 to £28 billion in FY26. The company flagged multiple headwinds such as steep US import duties, weaker demand in China, adverse currency movements, evolving regulatory standards, and slower-than-anticipated adoption of electric vehicles.

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Friday’s AGM marked N. Chandrasekaran’s first appearance before shareholders following the tragic Air India Flight 171 incident on June 12, after his absence from earlier meetings at Tata Consumer Products and TCS.

The gathering carried added weight, as it was the final annual general meeting for Tata Motors before the company formally restructures into two separately listed entities by the end of the year—one focused on Passenger Vehicles, the other on Commercial Vehicles (CVs)

Addressing investor concerns, Chandrasekaran downplayed the immediate impact of China’s export curbs on rare earth magnets, noting that Tata Motors is actively working on diversifying its supply sources. Rare earth elements are vital to the manufacturing of permanent magnets, which serve as key components in electric vehicle motors.