Carlos Tavares has resigned as the CEO of Stellantis, one of the world’s largest carmakers, following months of tension with the board and significant operational challenges.
Stellantis, which owns brands like Jeep, Fiat, Peugeot, and Maserati, announced Tavares’ departure on Sunday, with immediate effect.
Tavares played a central role in the 2021 merger of PSA Group and Fiat Chrysler to form Stellantis. He previously expected to remain CEO until 2026. An interim executive committee, led by Elkann, will manage the company while a global search for a new CEO is conducted.
Market reaction
The announcement sent Stellantis shares tumbling over 7% in early European trading on Monday, reflecting investor concerns about leadership uncertainty and the automaker’s strategic direction. The drop compounded a difficult year for Stellantis, which has already seen its stock decline by 40% in 2024.
Shares are currently trading at 11.75 euros, down 6.5% over the past five days.
Former Nissan and Aston Martin CEO Andy Palmer lauded Tavares as “perhaps the most professional car guy I’ve worked with,” highlighting his role in creating Stellantis and his contributions to iconic car designs.
However, UAW President Shawn Fain criticized Tavares’ tenure as detrimental to workers, stating, “Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots.”
Struggling to shift gears
Stellantis chair John Elkann revealed that “different views” between Tavares and the board led to the resignation, which comes after a tumultuous year. In September, Stellantis issued a profit warning, due to sluggish North American sales and excess inventory. Sales in the US dropped 17% year-on-year in the third quarter, with underperformance across brands like Jeep, Dodge, and Chrysler.
Tensions reportedly escalated over Tavares’ focus on short-term profitability at the expense of long-term strategy. Meanwhile, labor unions in the US and Italy criticised his management style, citing layoffs and unmet commitments. In Italy, Tavares faced political backlash over production relocations.
The closure of the Vauxhall van plant in the UK, which affected over 1,000 workers, further strained relations with stakeholders.
Stellantis’ €50 billion electrification investment also faced scrutiny. While Tavares championed ambitious goals for BEV sales in Europe, the company’s EV market share declined by nearly 2% year-on-year. Analysts attribute the drop to strong competition from Chinese EV makers and sluggish demand in Europe.
Stellantis now faces the dual challenge of stabilising its leadership and addressing operational shortcomings. The board has emphasised the need for “new ideas and fresh forces” to navigate the EV transition and regain market share.