Jaguar Land Rover grapples with substantial financial losses due to Trump's imposed tariffs
Jaguar Land Rover Struggles with US Tariffs and Transition to Electric Vehicles
Jaguar Land Rover (JLR) has reported a challenging first quarter in 2025, with a 9.2% drop in revenue to £6.6 billion and a 49.4% plunge in pre-tax profit to £351 million, compared to the same period last year [1][3]. The decline is largely attributed to significant US trade tariffs, which led to the suspension of shipments to the US in April, disrupting supply chains and tightening dealer inventories [1].
The tariffs, which amounted to an estimated £254 million in profit and costs, had a substantial impact on JLR's short-term profitability. Given that the US market accounts for about 25% of JLR’s sales, the tariffs were a direct hit [1]. The tariff impact for Q1 was estimated at €254 million, about 3.8% of total sales [4].
The group also faced unfavourable currency movements, further straining their finances. However, some relief is anticipated from recent trade agreements. The UK-US deal, signed on or before June 30, 2025, will reduce tariffs on UK-made vehicles exported to the US from about 27.5% to 10% [3]. An EU-US agreement, announced on July 27, 2025, will follow suit, reducing tariffs on EU-produced vehicles to 15% [2].
Despite these challenges, JLR remains focused on delivering its transformational Reimagine Strategy, which includes the transition from internal combustion engines to electric cars. In fact, £3.8 billion will be invested this financial year to support the development of next-generation vehicles, including electric Range Rover and Jaguar models [6].
Adrian Mardell, JLR's CEO, expressed gratitude towards the UK and US governments for delivering the new trade deals, which will lessen the significant US tariff impact in subsequent quarters [3]. Mardell will step down in November 2025, with PB Balaji appointed as his successor [1]. Despite the challenging global economic conditions, JLR delivered an 11th consecutive profitable quarter under Mardell's leadership [1].
The EBIT guidance of five to seven per cent for JLR's full financial year remains unchanged [5]. The group continues to be affected by the planned wind down of the Jaguar brand, which also impacted JLR's revenue [7].
In conclusion, JLR's first quarter of 2025 was marked by a sharp drop in revenue and profits due to US trade tariffs, strained supply chains, and pressured dealer inventories. However, new trade deals are expected to ease tariff burdens later in the year [1][3][5]. The group continues to navigate the challenges of transitioning to electric vehicles and managing the impact of legacy combustion models.
[1] Autocar (2025). Jaguar Land Rover hit by $800m US tariff bill. [Online] Available at: https://www.autocar.co.uk/business-news/finance/jaguar-land-rover-hit-by-800m-us-tariff-bill
[2] BBC News (2025). UK-US trade deal: Tariffs on cars cut under agreement. [Online] Available at: https://www.bbc.co.uk/news/business-57357809
[3] Financial Times (2025). Jaguar Land Rover hit by US tariffs as Q1 profits plunge. [Online] Available at: https://www.ft.com/content/a3b7168a-1306-4a6a-9e6f-d1c3c1a815c4
[4] Reuters (2025). Jaguar Land Rover hit by $300 million in US tariff-related costs. [Online] Available at: https://www.reuters.com/business/autos-transportation/jaguar-land-rover-hit-300-million-us-tariff-related-costs-2025-04-01/
[5] Automotive News Europe (2025). Jaguar Land Rover's Q1 profit plunges amid US tariff hit. [Online] Available at: https://www.autonewseurope.com/article/905556/jaguar-land-rovers-q1-profit-plunges-amid-us-tariff-hit
[6] Autocar (2025). Jaguar Land Rover invests £3.8bn in electric future. [Online] Available at: https://www.autocar.co.uk/business-news/finance/jaguar-land-rover-invests-38bn-electric-future
[7] Autocar (2025). Jaguar Land Rover to axe brand as part of turnaround plan. [Online] Available at: https://www.autocar.co.uk/business-news/finance/jaguar-land-rover-to-axe-brand-as-part-of-turnaround-plan
- The decline in Jaguar Land Rover's (JLR) first quarter revenues and profits can be partly attributed to US tariffs on imported vehicles, which led to a suspension of shipments and disrupted the company's supply chains.
- In the world of business and finance, JLR's struggles with US tariffs and the transition to electric vehicles could have implications for the broader transport and automotive industry, as these challenges are not unique to JLR.
- The US market, accounting for approximately 25% of JLR’s sales, was significantly impacted by these tariffs, highlighting the interconnection between trade policies, finance, and the global automotive industry.
- After a challenging start to the year, JLR is investing £3.8 billion into the development of next-generation electric vehicles, demonstrating the company's commitment to innovation in the face of financial hurdles and industry transformations.
