US Tariffs, EV Crawl Upset Indian Auto's Global Drive

Electric transformation has not worked as expected, and tariffs have made it worse

- Ayaan Kartik

A slowdown in the global electric journey and new US tariffs on auto imports threaten a one-two punch for the overseas ambitions of India's auto and ancillary makers, prompting many of them to sharpen their focus at home.

Tata Motors Ltd and Ashok Leyland Ltd, India's third-largest passenger and commercial vehicles respectively, are among companies rethinking global strategies, while component makers stare at uncertainty after the latest Trump tariffs.

While Ashok Leyland has decided to stop making electric buses and light commercial vehicles in the UK citing muted EV adoption, Tata Motors, which was earlier optimistic about EV exports, has decided to extend the life of Jaguar Land Rover's internal combustion engine platforms and even introduce more variants on them. The latest Trump tariffs have worsened the prospects for the industry, especially for component makers who draw a big chunk of sales from the US.

"The entire auto industry has to deal with global uncertainty for now. Especially for the auto component space, the US was one of the biggest markets, and the imposition of tariffs by the US could cause a slowdown within the next year," said Preetesh Singh, a specialist at Nomura Research Institute.