Tata Motors Unfazed by Rare Earth Supply Concerns, Pushes Ahead With EV Plans

Tata Motors and its UK-based subsidiary Jaguar Land Rover (JLR) have said the ongoing global concerns over rare earth magnet supplies have not impacted their electric vehicle (EV) production and are unlikely to do so in the near term.

Speaking after the company’s Q1 FY26 earnings announcement on Friday, Group CFO P.B. Balaji stressed that production schedules remain intact. “Absolutely no impact on production so far, as far as rare earths are concerned—nothing in the foreseeable future,” he said, adding that the company has learnt valuable lessons from the semiconductor shortage and has acted early to protect supply lines.

Rare earth magnets, essential for EV motors, have been in the spotlight since China restricted exports of certain elements last year. Balaji said Tata Motors is taking a “multi-pronged approach” to reduce dependency, which includes redesigning components, sourcing from alternative suppliers, and exploring substitutes. 

“We are continuing to de-risk ourselves, and we are confident we’ll de-risk completely,” he noted. Domestically, the automaker is covered for the next two to three months and is actively scouting non-China sources.

While Balaji acknowledged “a few challenges” could emerge in the coming quarters, he expressed confidence in the company’s ability to manage them. “The learnings coming from the semiconductor crisis have meant that we have been off the blocks quite fast. That has helped us cope well both here and in JLR,” he said.

JLR faces China luxury tax and Trump criticism

JLR, however, is navigating fresh headwinds in China after the government lowered the luxury tax threshold from 1.3 million RMB to 900,000 RMB, effectively placing almost all Range Rover models under the 10% levy. This comes at a time when retail finance remains tight in the Chinese market.

On another front, US President Donald Trump recently criticized Jaguar’s brand revamp, calling the company in “absolute turmoil” following a promotional video that featured fashion-show visuals without cars and omitted its iconic leaping cat logo. Trump linked the rebrand to the resignation of current CEO Adrian Mardell, a claim Tata Motors has rejected.

Balaji, who will take over as JLR CEO in November, defended the new direction, saying the early response has been encouraging. “We have put our plans together, the cars are being revealed, and they’re getting exciting responses from customers on the ground. That’s the strategy,” he stated.

Jaguar has halted production until its fully electric lineup is ready next year, with the aim of appealing to younger buyers and shifting towards selling fewer vehicles at higher prices. “You need to compare our numbers vis-à-vis how others are delivering,” Balaji said, countering criticism from Trump and other public figures such as Nigel Farage and Elon Musk.

Also Read: Tata Motors Q1 Profit Plunges 63% on Volume Decline and JLR Weakness | Republic World

Tariffs weigh on profits

JLR’s operations have also been affected by US trade tariffs, particularly on luxury SUVs, which have dented American sales. Tata Motors reported that its consolidated profit fell by nearly two-thirds in the latest quarter, with US tariffs and China’s tax changes adding pressure to an already challenging global automotive market.

Despite these hurdles, Tata Motors is pushing forward with its EV strategy while working to secure a resilient supply chain for critical components. As Balaji summed up, “We’re not waiting for disruptions to hit us—we’re acting now to make sure they don’t.”