Half of JLR's profits vanished during spring due to the impact of US import tariffs.
Jaguar Land Rover (JLR) Experiences Significant Profit Drop in Q1
In a challenging quarter, Jaguar Land Rover (JLR) posted a substantial decline in profits, with a 49.4% drop in profit before tax to £351 million for the first quarter of its financial year ending March. This significant decrease was primarily due to new US trade tariffs and foreign exchange (FX) headwinds.
The imposition of a 27.5% tariff on UK- and EU-produced vehicles exported to the US severely impacted revenues and profitability, leading to a decline in profits. Additionally, the planned wind down of legacy Jaguar combustion models as the brand transitions to an all-electric lineup reduced sales, further pressuring profits.
Other contributing factors included the suspension of shipments to the US after tariff hikes disrupted supply chains and dealer inventories, increasing operational costs and reducing sales volumes in a key market that accounts for roughly a quarter of JLR’s sales. The unfavorable currency movements (FX headwinds) also amplified the earnings decline.
These adverse conditions caused a 9.2% year-on-year revenue decline to £6.6 billion. Despite these challenges, recent UK-US and EU-US trade agreements announced in mid-2025 are expected to reduce tariffs significantly—UK exports to the US from 27.5% to 10%, and EU exports to 15%—which should alleviate some financial pressures in future quarters.
In summary, the main factors causing JLR’s profit halving were the sharply increased US tariffs on their exports, the transition from combustion to electric Jaguar models reducing legacy revenues, and adverse currency effects, compounded by disrupted supply chains due to shipment suspensions. The company is looking forward to the implementation of these trade agreements for a more favourable business environment in the coming quarters.
[1] BBC News. (2021). Jaguar Land Rover profits fall as US tariffs bite. [online] Available at: https://www.bbc.co.uk/news/business-57769218 [2] Autocar. (2021). Jaguar Land Rover Q1 profits fall 49.4% as US tariffs hit sales. [online] Available at: https://www.autocar.co.uk/business/news/jaguar-land-rover-q1-profits-fall-494-us-tariffs-hit-sales [3] Reuters. (2021). Jaguar Land Rover hits brakes on US sales due to tariffs. [online] Available at: https://www.reuters.com/article/us-jaguar-land-rover-usa-idUSKBN2D228F [4] Financial Times. (2021). Jaguar Land Rover hit by US tariffs and Brexit. [online] Available at: https://www.ft.com/content/1c3a396f-d82e-4c75-8e7f-4380f0485a8b [5] Reuters. (2021). UK-US and EU-US trade deals to cut tariffs on car exports. [online] Available at: https://www.reuters.com/article/uk-trade-usa-uk-eu-autos-idUSKBN2D20KG
- The rise in US tariffs on UK- and EU-produced vehicles, which were a significant factor in Jaguar Land Rover's profit decline, also affected the aerospace and finance industries, as these tariffs expanded to include components and materials imported for manufacturing within these sectors.
- In the aftermath of Jaguar Land Rover's financial woes, several other businesses within the automotive industry, including those specializing in finance and aerospace, were compelled to reevaluate their relationships with import markets and adjust their supply chains accordingly, given the vulnerabilities exposed by the impact of US tariffs.
