Tata Motors Shares Tanks 6% After JLR Slams Brakes on US Shipments

Tata Motors' stock tumbled nearly 6.23% to Rs 575.60 after its UK-based subsidiary, Jaguar Land Rover (JLR), announced a one-month pause in vehicle exports to the US. The move follows a 25 percent import tariff on foreign vehicles imposed by the US government starting April 2.

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JLR, which earns a significant chunk of its revenue from the US, said the pause will help the company “reassess” trade strategies and work with partners on a long-term plan. Despite this, JLR reported strong global sales for the last quarter of FY25, with wholesale volumes up in North America and Europe but down in China.

Nomura had previously estimated that the Trump administration's tariffs could add around $3,700 to vehicle costs—roughly 8% of the average selling price. Even if manufacturers pass on half the cost through a 4% price hike, the brokerage firm believes this could still reduce US car demand by 8%, or about 1 million units, compared to the projected 16 million new vehicle sales in the US for 2024.

Another brokerage firm, CLSA, recently downgraded Tata Motors from its 'High Conviction Outperform' rating to a standard 'Outperform'. It also lowered the stock’s target price from ₹930 to ₹765. It is projecting a 14 percent decline in Jaguar Land Rover’s sales volume in FY26 due to the new tariffs, along with a fall in EBITDA margins to 7% in FY26 and FY27, down from 9 percent in FY25.

Despite recent challenges, JLR posted steady performance in the fourth quarter and full year ending March 2025. Wholesale volumes for Q4 stood at 1.11 lakh units, a 6.7% increase from the previous quarter and a modest 1.1% rise year-on-year. The US and Europe led the growth, while China and other overseas markets saw declines.

JLR's retail sales, however, dipped 5.1% compared to the same period last year, even though they inched up slightly from the previous quarter.

For the full year, wholesale and retail numbers stayed mostly flat, and the company ended FY25 on a positive note by achieving a net cash position—one of its key financial goals under the "Reimagine" strategy. High-margin models like the Range Rover and Defender made up over two-thirds of wholesale volumes, highlighting a continued push toward premium offerings.

JLR will be releasing its detailed FY25 results and FY26 outlook in May.