Tata Motors shares fell 5% after U.S. President Donald Trump announced a 25% tariff on all automobiles and light trucks imported into the United States. The tariffs, set to take effect on April 2, aim to boost domestic manufacturing by incentivizing automakers to produce vehicles within the U.S.
The move has triggered a sharp selloff in global auto stocks. Major U.S. automakers were hit hard, with General Motors (NYSE: GM) sliding 8%, while Ford (NYSE: F) and Stellantis (NYSE: STLA) each declined by around 4.5%. Japanese automakers Toyota, Mazda, and Subaru saw stock prices drop 4%, 5%, and 6%, respectively.
Morgan Stanley on Tata Motors- Key Takeaways
- The U.S. accounted for ~23% of JLR’s sales in FY24 (~15% of Tata’s consolidated sales), and its share is increasing, exceeding 30% in F3Q25 sales.
- Tata Motors has three medium-term options: passing costs to customers, cost-cutting, or absorbing the impact.
- If part of the tariffs is absorbed, JLR’s FY26e EBIT could see a sharp 200 bps+ downside risk from the current 8.3% assumption.
- JLR’s free cash flow (FCF) will also take a hit, possibly prompting the company to plan a U.S. manufacturing facility.
- A sharp downside stock reaction is expected as a result of this news.
Tata Motors’ stock opened, hit a high, and stayed at ₹668, showing no intraday movement. The stock remains well below its 52-week high of ₹1,179 but above its low of ₹606.30.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
