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Can Tata Motors Navigate the Perfect Storm of US Tariffs, EV Wars, and China’s Crisis?

  • Writer: AltG
    AltG
  • Mar 27
  • 3 min read
An infographic illustrating Tata Motors' challenges, including US tariffs, declining JLR sales in China, and rising EV competition in India, alongside its strengths in North America and potential turnaround strategies.

Shares of Tata Motors plunged up to 6 percent on March 27 as investors hit the brakes on auto stocks, spooked by Trump's 25 percent tariff on foreign car imports to the US. But while investors scrambled to make sense of the immediate impact, a deeper issue lurked beneath the surface—Tata Motors' struggles in China and the shifting dynamics of India’s electric vehicle (EV) market.



A Legacy Built on Global Growth

For years, Tata Motors has been a powerhouse, driven by its diverse portfolio spanning commercial vehicles in India, domestic passenger cars, and its crown jewel—Jaguar Land Rover (JLR). The company’s sales split tells a compelling story:


Photo of Can Tata Motors' Recover From The Perfect Storm Of Tariffs, EV Wars, and a China Crisis?

While Tata Motors has enjoyed an 846.82% increase in stock price over the last five years, far outpacing Maruti Suzuki's 153.73% and NIFTY 50's 172.46%. 


Over the last five years, Tata Motors' stock has significantly outperformed its key competitors:


Photo of TATA Motors Stock price in last 5 years

However, recent stock performance and business challenges are prompting investors to ask a critical question: Can Tata Motors sustain its past success in the face of mounting global headwinds?


India’s EV Boom: A Double-Edged Sword


Tata was an early mover in India’s EV space, capturing market share before the competition even woke up. But 2025 is not 2020. Today, everyone is in the EV game:


  • Maruti Suzuki is launching budget-friendly EVs.

  • Mahindra & Mahindra is aggressively expanding mid-budget EVs.

  • BYD and Tesla are entering India with high-tech alternatives.


Even the industry data paints a sobering picture:


Passenger Vehicle Sales Decline (YoY Change)

  • Overall PV Retail Sales (YTD): -4%

  • February PV Sales Drop: -10.34%

  • Tata Motors EV Sales Drop: -23%


The 23% drop in EV sales is a red flag. Once the company’s growth engine, Tata’s EV business is now struggling against intensified competition.


TATA Motors US Tariff Storm

Then came the US tariffs. While the full impact remains uncertain, there’s no denying the potential squeeze on Tata’s bottom line. However, tariffs are just one part of the JLR crisis—the real nightmare is unfolding in China.


JLR’s China Sales Are Plummeting

Despite a booming market, JLR’s China sales nosedived 38% YoY in Q3 FY25. In contrast, China's overall passenger vehicle sales surged 26% YoY.



Photo of Can Tata Motors' Recover From The Perfect Storm Of Tariffs, EV Wars, and a China Crisis?

China is the world’s largest auto market, and Tata is losing ground. Worse, AltG’s local research suggests January and February were equally dismal. As the Chinese market shifts toward domestic EV brands, JLR’s appeal is fading fast.




The Path Ahead: A Race Against Time


With India’s EV competition heating up, US tariffs threatening profitability, and China slipping away, Tata Motors is in a tough spot. While exposure to North America remains a bright spot, global headwinds are outweighing the tailwinds.

AltG’s Take: More Downside to Come?


Looking at the bigger picture, we see more risks than opportunities for Tata Motors in

the near to medium term:


Positives:

✅ Strong presence in North America and China (if they can turn China around)

Dollar appreciation could help margins


Negatives:

Indian market saturation with sluggish growth trends

Weak commercial vehicle (CV) demand amid limited government infrastructure spending

JLR’s China struggles worsening despite a booming overall market


Conclusion:

JLR must navigate regional headwinds with agility. To sustain momentum, the company must leverage its North American success while addressing challenges in struggling markets through strategic innovation and supply chain resilience.


Things will get bad before they get better. We see an 11% downside to Tata Motors’ current valuation unless the company unveils a clear, aggressive turnaround plan—fast.


Disclaimer: In the article "Can Tata Motors' Recover From The Perfect Storm Of Tariffs, EV Wars, and a China Crisis?" above - Any views, comments or communication (above or in the past) should not be construed to be investment advice by Alternative Growth (hereafter referred to as “AltG”) in any form whatsoever. AltG does not make an offer to sell or solicit to buy any securities.


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