Tata Motors Eyes Relief for JLR Amid Tariff Shakeups; Profit Outlook Remains Clouded

Tata Motors expects partial tariff relief for its luxury arm Jaguar Land Rover (JLR) following recent trade agreements between the UK and both the United States and India, though the financial impact remains unclear.

Tata Motors Group CFO P.B. Balaji, speaking during the Q4 FY25 earnings call, said the company welcomes the developments but is awaiting detailed “policy notifications.”

“It’s directionally positive, but we need clarity on timing, applicability, and whether the reduced tariffs extend to components. We also hope for retrospective implementation,” noted Balaji.

The US-UK deal cuts duties on British car exports to 10% from 25%, easing the burden after JLR halted US shipments last month due to soaring tariffs. Still, the new rate is higher than the previous 2.5%, prompting JLR to step up cost-cutting efforts.

“A retrospective rollback could soften recent losses,” stated Balaji, with clarity expected within weeks.

In India, the new free trade agreement with the UK slashes import duties on fully built units from the UK from over 100% to 10%. While existing models like the Range Rover are assembled locally and not directly affected, the deal paves the way for globally priced future launches.

“This allows us to bring international models to Indian consumers at competitive prices,” Balaji said.

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Betting on upcoming BEVs

JLR’s upcoming launches are expected to bolster momentum. The Jaguar Type 00 electric sports car, currently on a global reveal tour, has received over 32,000 expressions of interest. Meanwhile, the Range Rover Electric—set for launch after winter testing in Sweden—has a waitlist exceeding 61,000 units.

Cautious Outlook

Despite all the tailwinds, Tata Motors withheld its FY26 EBIT margin guidance for JLR, which contributes about two-thirds of its revenue, citing tariff uncertainties. Although JLR achieved its FY25 EBIT target of 8.5%, the company did not reaffirm its 10% goal for FY26.

“We’re reviewing our guidance post the UK-US deal and will share updates at our June 16 investor day,” Tata Motors said.

Bottomline dips

Automobile major Tata Motors (TML) registered a 51% drop in consolidated net profit for the quarter ended 31 March to Rs 8,470 crore, due to a deferred tax asset of nearly Rs 9,000 crore in the same quarter last fiscal and an exceptional item of Rs 566 crore during the quarter.

The company said it remains focused on managing costs amid ongoing volatility.

“We’re tightening control across material, warranty, and operating costs,” Balaji said. “The net impact of tariffs and internal efficiencies should become clearer in the coming quarters.”