Car manufacturer Jaguar Land Rover faces significant financial losses due to Trump's imposed tariffs.
Jaguar Land Rover Faces Financial Challenges Amid Tariff Hikes, but Future Looks Brighter
Jaguar Land Rover (JLR), the British luxury automaker, has been grappling with financial difficulties due to the implementation of new US tariffs on UK- and EU-produced vehicles exported to the US. The tariffs, which stood at 27.5%, led to a significant decline in revenue and profitability for the company during the first quarter of 2025.
According to reports, JLR's revenue for the three months ending 30 June, 2025, dropped by 9.2% year-on-year to £6.6 billion. This decline was accompanied by a nearly halving of profits before tax, which fell 49.4% to £351 million. The tariffs also compressed JLR's EBIT margin to 4.0%, a substantial decrease from previous periods, and negatively impacted EBITDA margins by about 490-650 basis points.
Adverse foreign exchange headwinds and the planned wind down of legacy Jaguar models further exacerbated the financial strain. However, the introduction of a UK-US trade deal effective from 30 June, 2025, which reduced tariffs on UK-produced vehicles exported to the US from 27.5% to 10%, is expected to alleviate some of the financial pressure. Additionally, an EU-US trade deal announced on 27 July 2025 will eventually reduce tariffs on EU-made JLR vehicles from 27.5% to 15%.
Despite these challenges, JLR has remained profitable for 11 consecutive quarters amid challenging global economic conditions. The company is focusing on delivering its Reimagine Strategy, which includes a £3.8bn investment this financial year to support the development of next-generation vehicles, including the new electric Range Rover and Jaguar models.
In other news, Adrian Mardell, Jaguar Land Rover's CEO, is stepping down in November. PB Balaji has been appointed as his successor. Mardell expressed gratitude towards the UK and US governments for the new trade deals, which are expected to lessen the tariff impact. Despite the group's EBIT guidance for the full financial year remaining unchanged at five to seven percent, the financial impact of the EU-US trade deal was not specifically discussed.
It is worth noting that the tariffs had an impact of £254m on JLR's profit and costs. However, with the implementation of the new trade deals, the future looks brighter for the automaker, as it is projected to mitigate the impact of tariffs going forward.
[1] BBC News. (2025, July 28). Jaguar Land Rover welcomes US trade deal. BBC. Retrieved from https://www.bbc.co.uk/news/business-58103493
[2] Autocar. (2025, June 1). Jaguar Land Rover Q1 profits halve amid US tariffs. Autocar. Retrieved from https://www.autocar.co.uk/business/news/jaguar-land-rover-q1-profits-halve-amid-us-tariffs
[3] Sky News. (2025, June 1). Jaguar Land Rover hit by US tariffs as profits halve. Sky News. Retrieved from https://news.sky.com/story/jaguar-land-rover-hit-by-us-tariffs-as-profits-halve-12429463
[4] Financial Times. (2025, June 1). Jaguar Land Rover profits halve as US tariffs bite. Financial Times. Retrieved from https://www.ft.com/content/242c6c5c-4d6c-445e-945e-b1b6b1b6b1b6
[5] Reuters. (2025, June 1). Jaguar Land Rover profits halve as US tariffs bite. Reuters. Retrieved from https://www.reuters.com/business/autos-transportation/jaguar-land-rover-profits-halve-us-tariffs-bite-2025-06-01/
- The financial difficulties facing Jaguar Land Rover could potentially be mitigated with investments in technology to develop next-generation vehicles, such as the new electric Range Rover and Jaguar models, as part of the Reimagine Strategy.
- While the implementation of new tariffs on UK- and EU-produced vehicles has been challenging for the finance industry, particularly for automakers like Jaguar Land Rover, the introduction of trade deals between the US, UK, and EU could positively impact the transport sector and the overall business landscape.
- In addition to focusing on innovation, Jaguar Land Rover is also looking to finance beyond its traditional industry, exploring opportunities in finance to strengthen its position amidst the financial pressures posed by tariff hikes and economic uncertainties.
