Carlos Tavares, the CEO of Stellantis and a key architect of the PSA-FCA merger, stepped down on 1 December 2024, ending a nearly four-year tenure during a turbulent time for the automaker.
His exit, two months after a profit warning wiped nearly 50% off Stellantis’ market value, reflects the struggles faced by legacy carmakers in the transition to electric vehicles (EVs).
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In the wake of Tavares’ resignation, Stellantis shares tumbled by more than 7% during early morning trading in Europe, as investors reacted with evident concern over the leadership void and uncertainty surrounding the automaker’s future strategy.
Ambitious goals, disappointing results
Tavares had championed Stellantis’ €50bn electrification investment, aiming for 100% battery electric vehicle (BEV) sales in Europe by 2030.
However, sales fell short of expectations. According to the latest Bank of America’s EV Tracker, Stellantis sold 173.4 thousand BEVs in the first half of 2023, a figure that dropped to 157.7 thousand in the first half of 2024 – a 9% decline year-on-year.
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This slump coincided with Stellantis losing ground in the global EV market.
Stellant’s global market share in the EV segment fell to 3.5% in the first half 2024, compared with 5.3% in the first half of 2023, as Chinese EV manufacturers surged ahead with competitive pricing and innovation.
These struggles contributed to Stellantis shares tumbling nearly 50% this year and eroded confidence in Tavares’ leadership.
Tavares’ exit: What happens next?
Tavares was the highest-paid automotive manager in 2023 with a €36.49m compensation package.
The decision to part ways was reportedly reached with unanimous consensus among Stellantis’ board members.
While Stellantis praised Tavares for his contributions to the company’s formation and initial success, internal disagreements between the board and the CEO played a key role in his departure.
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Chairman John Elkann cited “different views” on Stellantis’ direction as the catalyst for Tavares’ resignation.
The Stellantis board has initiated a search for Tavares’ successor, aiming to finalise the appointment by mid-2025. In the interim, Elkann will chair a newly established executive committee tasked with guiding the company through this transitional phase.
Industry voices and reactions
The car manufacturing sector has been quick to react to Tavares’ departure.
On X (formerly Twitter), 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 developing iconic cars. Palmer added: “I hope history will be kind to him.”
However, others were less sympathetic. Italian senator Carlo Calenda criticised Tavares for his managerial approach, stating: “We won’t miss Tavares. The proponent of Darwinian theories that only seemed to apply to workers. Now it’s even more urgent to summon John Elkann to Parliament.”
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CNBC correspondent Michael Wayland noted: “Tavares misunderstood the US market, prioritising pricing and profits over volume and investments. This alienated traditional consumers and led to quality declines.”
Investment analyst Brian Tycangco warned that Stellantis’ challenges reflect a broader trend, writing: “Legacy automakers are losing ground to Chinese EV brands even in their most profitable markets. Innovation is no longer optional.”
What lies ahead for Stellantis?
Tavares’ departure underscores the difficulties faced by legacy car makers as they attempt to transition from traditional combustion engines to electric powertrains.
Stellantis must now grapple with intensifying competition, falling EV sales, and the need to rebuild investor confidence.
German giants Volkswagen, BMW, and Mercedes-Benz also face similar headwinds, including falling EV market share and rising Chinese competition.
As Elkann takes temporary charge, Stellantis will be under immense pressure to find a leader capable of balancing innovation with operational excellence.
Whether the next CEO can reverse the company’s fortunes remains to be seen, but the stakes are high not only for Stellantis but also for the broader European car-making sector as it fights to remain competitive in an electrified world.
