Tata Motors shares rally over 2%; three key reasons why stock is rising

The stock witnessed buying as US President Donald Trump has delayed the 50% tariff on the European Union (EU) till July 9. July 9 is also the day when the 90-day pause on Trump's reciprocal tariff announcement on various countries comes to an end.

Trump had threatened to impose a 50% tariff on the European Union starting June 1, as "talks with the EU were going nowhere".

The Tata Motors stock has gained, as this decision of Trump has put Tata Motors' flagship unit Jaguar Land Rover (JLR) in the spotlight, as the company has a significant exposure to the US market.

According to a publicly available report, the US is the second-largest market for EU vehicle exports after the UK. The report adds that over a fifth of EU vehicle exports go to the US. Besides, 12% of EU vehicle imports come from the US.

Hence, a delay in the tariff imposition is a positive development for Tata Motors.

Tata Motors expansion plan

Another reason why the stock has gained is a statement by the auto major that it is seeking to regain its market share of 50% in the domestic electric passenger vehicle segment in the mid-to-long term through expansion and renewal of its product portfolio.

With the domestic electric passenger vehicle market fragmenting into four distinct segments on the basis of price points, the company will be entering the above ₹20 lakh category with its upcoming Harrier.ev and Sierra.ev, Tata Motors Passenger Vehicle and Tata Passenger Electric Mobility Managing Director Shailesh Chandra told PTI.

Tata Motors demerger to benefit Street, shareholders

Chairman N Chandrasekaran believes the proposed demerger of Tata Motors into two listed entities will bring strategic clarity and enable long-term returns for shareholders.

Addressing shareholders in the company's 80th Integrated Annual Report for FY25, the chairman noted that the demerger of Tata Motors into two listed entities—commercial vehicles and passenger vehicles (including EVs and JLR)—is progressing as planned.

"The proposed demerger will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation, delivering superior experiences for customers, rewarding careers for employees, and long-term returns for shareholders," Chandrasekaran said.