Introduction
Tata Motors, one of the most widely followed stocks among Indian investors, has seen its share price decline by over 46% from its peak. While some blame this on India’s slowing economy and weak GDP growth, the real issues go much deeper. The company’s three key business segments—Jaguar Land Rover (JLR), Commercial Vehicles (CV), and Passenger Vehicles (PV) including EVs—are all facing distinct challenges.
In this blog, we’ll analyze why Tata Motors’ stock is struggling, what challenges it faces across its business units, and whether these problems are temporary or long-term.
Tata Motors’ Business Segments
Tata Motors operates in three major segments:
1. Jaguar Land Rover (JLR) – The Biggest Revenue Driver
- Contribution to Total Sales: 71.6%
- Brands Included: Range Rover, Defender, Discovery, and Jaguar
2. Commercial Vehicles (CV) – Market Leader in India
- Contribution to Total Sales: 16.2%
- Products: Buses, trucks, and vans for commercial use
3. Passenger Vehicles (PV) and Electric Vehicles (EV)
- Contribution to Total Sales: 10.9%
- Products: SUVs, sedans, hatchbacks, and electric cars for personal use
Despite its dominance in these segments, Tata Motors is facing strong headwinds across all three businesses.
Challenges Across Tata Motors’ Business Segments
1. Jaguar Land Rover (JLR) – Supply Chain Issues & Competitive Pressure
JLR is Tata Motors’ most crucial segment, contributing over 70% of total revenue, but it is struggling due to:
- Jaguar’s Weak Sales Performance:
- Jaguar’s global sales fell from 12,100 units in Q3 2024 to just 5,600 units in Q3 2025.
- Why? Jaguar was slow to launch EVs, while BMW and Mercedes have already built strong electric lineups.
- Its brand appeal has faded, and recent models lack exciting features to attract premium customers.
- Land Rover’s Supply Chain Constraints:
- Aluminum shortages due to Swiss floods have disrupted production.
- Despite strong demand, supply issues have limited deliveries.
- Regional Challenges in Key Markets:
- UK: Jaguar is transitioning into an all-electric brand, leading to declining sales.
- China: Competition from domestic EV brands and high import taxes have made JLR vehicles less competitive.
2. Commercial Vehicles (CV) – Losing Market Share
Even though Tata Motors dominates the CV segment in India, the business is under pressure due to:
- Rising Competition: Other manufacturers are aggressively eating into Tata Motors’ market share.
- Industry-Wide Slowdown: Lower infrastructure spending and weaker mining activity have reduced demand for heavy-duty trucks.
- Stricter Emission Norms: The BS-VI emission standards have made trucks costlier, discouraging purchases.
3. Passenger Vehicles (PV) and Electric Vehicles (EV) – Growth Slowing Down
While this segment has been a growth driver in the past, it is now facing headwinds:
- High Inventory Levels: Dealerships are sitting on excess stock due to slowing demand.
- Rising Competition: Mahindra, Hyundai, and global players like BYD are gaining ground in the SUV and EV space.
- Declining EV Market Share:
- Tata Motors’ EV market share dropped from 73% in Q3 2024 to 53% in Q3 2025.
- Sales increased slightly, but competitors are growing faster.
Future Outlook for Tata Motors
Tesla’s India Entry: A Competitive Threat?
Tesla’s plan to open its first manufacturing unit in India could significantly impact Tata Motors’ EV segment. With local production, Tesla could price its EVs more competitively, attracting premium buyers. Tata Motors may face higher competition, price wars, and consumer preference shifts toward Tesla’s superior battery technology. However, Tata can mitigate this by expanding its EV lineup, improving battery efficiency, and increasing charging infrastructure.
Risk from Trump’s Tariff Policies & India’s Trade Response
If Donald Trump imposes new tariffs on UK and EU auto imports, India might reduce import duties on U.S. and European EVs in retaliation. This would make Tesla, BMW, and Mercedes EVs cheaper, pressuring Tata Motors’ market dominance. Additionally, higher U.S. tariffs on JLR exports could hit Tata Motors’ global sales. To counter these risks, Tata must accelerate cost-efficient production, strengthen its local supply chain, and expand JLR’s India manufacturing capacity.
Despite these challenges, Tata Motors has several opportunities to make a comeback. Here’s what investors should track:
1. JLR’s Performance
- Since JLR contributes 70% of revenue, its quarterly sales data will be critical for Tata Motors’ recovery.
2. Market Share in CV and PV Segments
- Watch whether Tata Motors regains lost market share in the commercial and passenger vehicle categories.
3. Key Global Events Impacting Tata Motors
- Trade Policies: If Donald Trump wins the US election and imposes new tariffs on UK and EU auto imports, JLR’s costs could rise significantly.
- Tesla’s India Entry: While Tesla is not an immediate threat, any policy changes favoring Tesla could impact Tata Motors’ EV business.
- Chinese EV Competition: If the Indian government reduces import duties on EVs, cheaper Chinese electric cars could flood the market, hurting Tata Motors’ sales.
Conclusion: Should Investors Worry About Tata Motors?
Tata Motors is a fundamentally strong company, but it faces short-term struggles across its business segments. However, it is actively taking steps to address these issues:
- JLR is rebranding Jaguar as an all-electric luxury brand.
- New product launches and digital transformation initiatives are underway.
- The potential demerger of Tata Motors’ commercial and passenger vehicle businesses could unlock value for investors.
While short-term challenges remain, Tata Motors’ long-term prospects look promising. Investors should closely track JLR’s performance, competitive positioning, and global trade developments before making investment decisions.
What do you think? Will Tata Motors make a comeback? Share your thoughts in the comments below!
FAQs
1. Why is Tata Motors’ stock falling?
Tata Motors is facing supply chain issues, EV competition, and slowing sales in key markets like China and the UK, leading to a 46% stock decline.
2. Will Tata Motors recover in 2025?
A recovery depends on JLR’s sales improvement, Tata’s ability to regain market share, and global trade policies impacting auto exports.
3. Is Tata Motors’ EV business under threat?
Yes, Tesla’s India entry and Chinese EV brands’ expansion pose significant challenges.
4. What should investors watch in Tata Motors’ future?
- JLR’s quarterly sales reports.
- Tata Motors’ market share trends in India.
- Government policies on EVs and auto imports.
5. Does Tata Motors’ demerger create value for investors?
Yes, if Tata Motors separates its CV and PV businesses, it could lead to better valuations for its EV segment.
