Tata Motors Sees Brighter FY26 for CV, PV Segments; Awaits Tariff Clarity

Tata Motors Ltd is optimistic about delivering better sales and earnings from its passenger vehicle (PV) and commercial vehicle (CV) businesses in FY26, but lacks clarity on Jaguar Land Rover (JLR) due to ongoing global tariff developments, Group CFO PB Balaji said on Tuesday.

“We can give you better numbers as far as CV and PV are concerned. But for JLR, we need more clarity on how the tariffs will play out,” Balaji said at a press conference to discuss the company’s FY25 financial performance.

JLR’s short-term prospects are clouded by evolving global trade dynamics, particularly in the US market. In April, the automaker implemented a series of interim measures to mitigate the impact of steep US tariffs on UK-made auto exports, which led JLR to halt shipments to the US in April.

“As far as JLR is concerned, there are just too many moving parts and we will have to wait till the more clarity emerges on the tariff side, in terms of how it is going to get treated. So therefore, let's just wait for the investor day on 16th of June, where we'll be able to give you a better update,” Balaji said.

The Tata Group company welcomed the recent US-UK trade agreement, which reduces US tariffs on UK vehicle imports from 27.5% to 10%, within an annual quota of 100,000 vehicles. While this brings partial relief, the new rate remains significantly above the earlier 2.5%, pushing JLR to pursue cost-efficiency initiatives.

“We welcome the development. It’s directionally on the right track and certainly a better situation than we faced earlier. However, we’re awaiting the fine print, especially on timing, applicability, and whether it extends to parts and accessories. We expect formal notifications and clarifications in the coming days, including whether the change will be applied retrospectively," Balaji said.

On the investments in JLR, the company expects spends to remain at £18 billion over a five year period, and the investment will be funded by operational cash flows.

PV and CV Segments

Balaji expects the CV and PV segments to perform better than last year, driven by improved market conditions, innovation, and an exciting product pipeline. “Next year is expected to be a year of growth, margin improvement, and market share gains in passenger vehicles,” he said, highlighting significant EV growth as well.

Tata Motors expects overall PV demand to be supported by macroeconomic trends such as consumption growth, inflation moderation, infrastructure spending, and evolving customer preferences. Growth will be led by SUVs, CNG, and EVs, backed by a robust product pipeline and a renewed focus on after-sales service.

“In terms of product activity, it’s probably going to be one of our most exciting launch phases. We have the Sierra launch coming up. We have the Punch mid-cycle refresh, that's happening. Altroz will be relaunched. And we also have the petrol powertrains coming through, as far as the Harrier and Safari are concerned. So there is a lot happening on the PV side,” Balaji said.

On the commercial vehicle side, Tata Motors anticipates continued growth aided by improving fleet utilization, a stable sentiment index, and infrastructure investments. “We’ve comfortably exceeded the double-digit EBITDA margin target with nearly 12%, and ROCE is strong at around 40%. Growth should resume this year following a weaker FY25,” Balaji said.

The company is also preparing for the smooth rollout of AC regulation in trucks, value enhancements across the portfolio, and upcoming new nameplate launches.

In FY25, Tata Motors reported total wholesales of 553,585 PVs, down 3% on year. Its overall passenger vehicle wholesales have been dragged down by the marked 13% decline in demand for its EVs, which have been impacted by the increased competition and product choice in the marketplace. During the year, the automaker’s CV sales dropped 5% on year to 376,903 units. Compared to CV and PV segments, JLR dispatched a total of 401,000 units in FY25, flat over year-ago period.