Stellantis and Jaguar Land Rover (JLR) signed a non-binding memorandum of understanding on Wednesday to explore collaboration on product and technology development in the United States.
The announcement was Stellantis’s third major one in two days — following the affordable E-Car project unveiled Tuesday and the Dongfeng Voyah European joint venture announced earlier Wednesday — and it arrived just 24 hours before Filosa presents his first formal strategic plan at the company’s Investor Day in Auburn Hills, Michigan, on Thursday.
The potential tie-up with the British brand addresses one of the most significant structural vulnerabilities in JLR‘s business: the company sells substantial volumes in the United States but maintains no manufacturing presence there leaving it exposed to the import tariffs.
Under the terms of the non-binding MoU, the two companies will explore opportunities to create synergies across product and technology development, leveraging what they described as complementary strengths.
“By working with partners to explore synergies in areas such as product and technology development, we can create meaningful benefits for both sides while remaining focused on delivering the products and experiences our customers love,” said Stellantis CEO Antonio Filosa.
“As we continue to evolve JLR for the future, collaboration will play an important role in unlocking new opportunities,” said JLR Chief Executive Officer PB Balaji.
“Working with Stellantis allows us to explore complementary capabilities in product and technology development that support our long-term growth plans for the US market,” Balaji added.
The companies cautioned that any resulting transactions would be subject to customary closing conditions, including the execution of binding definitive agreements — meaning the MoU is a framework for discussion rather than a confirmed deal.
The Core Problem
The single most important fact about JLR‘s US position is structural. Unlike its German luxury rivals Mercedes-Benz and BMW — both of which operate large US assembly plants — JLR has no manufacturing presence in the United States whatsoever.
Every Range Rover, Range Rover Sport, Defender, and Discovery sold in the US is imported, primarily from the United Kingdom and from JLR’s plant in Nitra, Slovakia.
That makes JLR among the most tariff-exposed luxury automakers in the American market, with roughly a quarter of its global sales historically tied to the US — at times its single largest market alongside China and the UK.
JLR has repeatedly stated, as recently as 2025, that it has no standalone plans to build vehicles in the US — making a partnership the most pragmatic path to localizing production and reducing tariff exposure.
Stellantis, by contrast, operates one of the largest US manufacturing footprints of any global automaker, with assembly plants across Michigan, Indiana, and Ohio producing Ram, Jeep, Dodge, and Chrysler vehicles, alongside recent multi-billion-dollar investments to expand capacity and reopen facilities.
A Premium SUV Powerhouse Under Pressure
The US is one of JLR‘s most important markets and a premium SUV stronghold, with Land Rover models — particularly the Defender, Range Rover, and Range Rover Sport — dominating the mix at roughly 70% to 74% of wholesales in recent quarters.
But the US business has come under severe pressure over the past 18 months.
JLR sold approximately 99,000 units in the US in 2024, a strong rebound year. That figure fell to approximately 84,000 units in 2025, a decline of around 15%.
The deterioration accelerated within JLR‘s fiscal year 2026, which runs from April 2025 to March 2026.
In the third quarter of fiscal 2026, covering October to December 2025, North American wholesale volumes collapsed 64% year-over-year, with retail volumes down 38% — a quarter battered by the combined effect of US tariffs and a major cyberattack.
The fourth quarter showed a partial recovery, with North American wholesale volumes down 19% year-over-year and retail down 14% as operations normalized.
For the full fiscal year, JLR‘s global wholesale volumes fell to 307,900 units, down 23.2%, while global retail sales declined 17.8% to 352,300 units.
The Tariff Squeeze
JLR‘s US troubles crystallized in 2025 around President Donald Trump’s tariff regime.
In April 2025, JLR paused all US-bound shipments after the Trump administration imposed a 25% duty on imported vehicles, which took effect on April 3.
The pause was a direct response to the tariff shock, with JLR redirecting inventory to what it called more accessible markets in the Middle East and Asia while it assessed the damage and adjusted US pricing.
In June 2025, JLR cut its fiscal 2026 EBIT margin forecast to between 5% and 7%, down from a previous 10% target — and below the 8.5% margin it had reported for fiscal 2025.
The company also warned of near-zero free cash flow for the year, down sharply from £1.4 billion the prior year.
A partial reprieve came through the UK-US bilateral trade agreement, which allowed the UK to export up to 100,000 vehicles annually to the US at a reduced 10% tariff rate — still higher than pre-2025 levels, but well below the blanket 25% rate.
The relief, however, was uneven across JLR’s lineup. The UK-built Range Rover and Range Rover Sport qualify for the lower 10% rate, but only within the 100,000-vehicle annual quota.
The Defender — one of JLR‘s most important growth models — is built in Slovakia, an EU member state subject to the full 25% US tariff, creating a structural cost disadvantage on one of the brand’s highest-demand vehicles.
The Cyberattack
JLR‘s US challenges were compounded by a catastrophic cyberattack disclosed on September 2, 2025, which forced the company to shut down systems and halt global production for weeks.
Manufacturing only began a phased restart in early October 2025 — supported by a £1.5 billion ($2 billion) UK government loan guarantee designed to protect JLR’s supply chain.
JLR attributed its full-year fiscal 2026 decline to a combination of the cyberattack, US tariffs, weak China demand, and the planned wind-down of legacy Jaguar models ahead of the brand’s relaunch as an all-electric marque.
The company reported its worst annual loss in nearly five years, prompting a three-pronged recovery plan targeting £1.7 billion in savings and cash break-even at approximately 300,000 vehicles per year.
The US Recalibration
JLR signaled earlier this month a strategic recalibration of its American product approach.
Speaking on Tata Motors’ fourth-quarter earnings call, JLR management said it may retain internal combustion engine vehicles in its US portfolio for longer, even as it continues its broader electrification investment program.
JLR Chief Financial Officer Richard Molyneux said the company remained committed to its multi-year investment plan, though “changing market dynamics could alter the allocation of spending across technologies and geographies.”
The willingness to extend ICE models in the US, the tariff exposure, and the absence of any US manufacturing base together create the strategic conditions in which a partnership with a US-heavy manufacturer like Stellantis becomes attractive.
The Dealer Network
JLR‘s US retail presence rests on roughly 200 or more Land Rover franchises, many of them dual JLR stores.
Jaguar is actively reducing its US dealer count as it pivots to a lower-volume, ultra-luxury electric brand, requiring fewer points of sale for its forthcoming lineup.
A more stable supply arrangement through US localization could strengthen the existing dealer network, improving delivery times, aftersales support, and long-term pricing competitiveness.
