JLR reported Q1 FY26 revenue of £6.6 billion, down 9.2% YoY, as US tariffs and legacy Jaguar wind-down hit sales. Profit before tax fell 49.4% to £351 million, with EBIT margin at 4%. CEO Adrian Mardell remains optimistic as new UK-US and EU-US trade deals are set to ease tariff pressures, while the company advances its “Reimagine” strategy, electric vehicle launches, and luxury model rollouts.
JLR (Jaguar Land Rover) Q1 FY26 Results
Jaguar Land Rover Automotive plc (JLR) has reported its financial results for the quarter ended 30 June 2025 (Q1 FY26), revealing a sharp year-on-year decline in revenue and profit, driven largely by new US trade tariffs and foreign exchange headwinds.
For the quarter, JLR posted revenue of £6.6 billion, down 9.2% compared to the same period last year. The drop was attributed to the imposition of a 27.5% US trade tariff on UK- and EU-produced vehicles exported to the United States, as well as the planned wind-down of legacy Jaguar models ahead of new launches. Wholesale volumes and revenues were both affected by these factors.
Profit before tax and exceptional items (PBT) stood at £351 million, down 49.4% from £693 million a year earlier, while EBIT margin came in at 4.0%. Profit after tax was £248 million, compared to £502 million in Q1 FY25. The company noted that the introduction of US tariffs and adverse foreign exchange movements had a direct and material impact on profitability and cash flow.
Free cash flow for the quarter was negative £758 million, reflecting the tariff impact, working capital movements, and continued investment. JLR ended the quarter with a cash balance of £3.3 billion and total liquidity of £5.0 billion, including an undrawn revolving credit facility of £1.7 billion. The company also paid an annual dividend of £448 million to its parent firm, TML Holdings Pte. Ltd.
Trade Deals to Ease Tariff Pressure
JLR’s performance in Q1 was hit hard by the tariffs, but relief is on the horizon. On 8 May 2025, the UK and US governments signed a trade deal reducing tariffs on UK-produced vehicles exported to the US from 27.5% to 10%, applicable within a quota of 100,000 vehicles per year. This deal took effect from 30 June 2025.
Further, on 27 July 2025, an EU-US trade deal was announced, which will lower tariffs on EU-produced vehicles exported to the US from 27.5% to 15%. This is expected to reduce financial strain in the coming quarters.
Reimagine Transformation Strategy Continues
Despite the tough external environment, JLR is pushing ahead with its “Reimagine” transformation strategy, focusing on modern luxury, electrification, and sustainability.
Highlights for the quarter include:
- Range Rover Electric prototypes received critical acclaim during media drives, with the waiting list now exceeding 65,000 customers.
- New model launches such as the Range Rover SV Masāra (India) and SV Saturio (Mexico), along with global launches of the Range Rover and Range Rover Sport SV Black models.
- Defender unveiled the OCTA Black Edition, hosted the Defender Trophy competition, and was named the official global automotive partner of Oasis Live ’25.
- Discovery introduced Tempest and Gemini Editions, plus Landmark and Metropolitan Editions for the Discovery Sport.
- Jaguar Type 00 debuted at high-profile events in Goodwood, Tokyo, Monaco, Paris, and Miami.
- JLR reaffirmed its historic ties with the British Royal Family through the granting of the Queen’s Royal Warrant.
On the sustainability and electrification front, JLR delivered over £100 million in value from reuse and refurbishment initiatives, advanced work on its Electric Propulsion Manufacturing Centre in Wolverhampton, and completed over 200 test builds of its next-generation electric Range Rover family SUV at Halewood.
CEO Commentary
Adrian Mardell, Chief Executive Officer of JLR, said:
“Thanks to our talented people and the robust foundations we have built at JLR, we delivered an 11th successive profitable quarter amid challenging global economic conditions. We are grateful to the UK and US Governments for delivering at speed the new UK-US trade deal, which will lessen the significant US tariff impact in subsequent quarters, as will, in due course, the EU-US trade deal announced on 27 July 2025. Looking ahead, we remain focused on delivering our transformational Reimagine Strategy, including investing £3.8 billion this financial year to support the development of our next-generation vehicles, including our stunning new electric Range Rover and Jaguar models.”
Outlook
JLR’s guidance for FY26 remains unchanged, with an EBIT margin expected in the range of 5% to 7%. Free cash flow for the full year is projected to be close to zero. The company continues to target investment of £18 billion over the five-year period starting in 2024, fully funded from operating cash flows.
While Q1 FY26 saw significant headwinds from US tariffs and FX movements, upcoming trade deal benefits, coupled with strong demand for new luxury and electric models, are expected to provide some relief in the coming quarters.