More than a decade after Jaguar Land Rover (JLR), owned by Tata Motors, first explored the possibility of establishing manufacturing operations in North America, the automaker now appears increasingly likely to develop an assembly presence in the United States.
According to a report, growing US tariffs are reshaping global automotive supply chains and have strengthened the case for JLR to produce vehicles closer to its largest market.
On May 20, JLR signed a memorandum of understanding with Franco-Italian automaker Stellantis to examine opportunities for cooperation in US product development, potentially paving the way for shared production capacity and local manufacturing.
North America represents JLR’s largest market, accounting for more than 28% of its global wholesale volumes at the end of FY26. However, unlike the UK and China, where JLR already operates manufacturing facilities, the company does not currently have a production base in the US.
That absence has become increasingly problematic as President Donald Trump’s trade policies have raised the cost of importing vehicles into the American market.
During Stellantis’ Investor Day 2026 on May 21, Stellantis CEO Antonio Filosa, who is also responsible for North America and the company’s American brands, suggested that the partnership with JLR could involve much more than product development. He indicated that such alliances could create opportunities to combine resources and capabilities across several areas.
The US introduced a 25% tariff on vehicles manufactured outside the country in April 2025, increasing the cost of imported premium automobiles.
JLR was affected almost immediately, with its wholesale volumes in North America declining 22% year over year during the first quarter of FY26 as higher tariffs put pressure on both consumer demand and company margins.
Industry analysts viewed Filosa’s comments as an indication that JLR could potentially make use of Stellantis’ existing US production facilities instead of spending billions of dollars developing an entirely new manufacturing plant. Such an approach could allow JLR to establish a US production footprint more quickly while limiting the capital investment required.
JLR’s tariff challenges have become more complicated despite a separate trade agreement between the US and UK reached in May 2025. Under the arrangement, British-built vehicles imported into the US receive a reduced 10% tariff on the first 100,000 units imported each year.
However, the quota had already been surpassed in 2024, reducing the practical advantage of the agreement for UK manufacturers such as JLR. Vehicles imported above the annual limit are subject to a combined tariff rate of 27.5%.
