Stellantis CEO Carlos Tavares has officially resigned as of December 1, 2024, marking the end of his tenure effective immediately. The announcement came following the automaker's challenging year, characterized by declining profits and sluggish sales, particularly within its U.S. market. The board of directors accepted Tavares' resignation after discussions revealed diverging views between him and the board, leading to what was described as mutual decision-making.
Henri de Castries, Stellantis’ senior independent director, stated, "Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board, and the CEO. Cependant, recently, different perspectives have emerged." This indicates underlying tensions and shifting dynamics within the company’s leadership structure.
The chairman of Stellantis, John Elkann, emphasized the impact of Tavares during his tenure, noting, "Our thanks go to Carlos for his years of dedicated service and the role he has played in the creation of Stellantis.” He expressed his commitment to working alongside the new Interim Executive Committee to appoint Tavares' successor, expected to be finalized by mid-2025.
Tavares, 66, played a pivotal role since the formation of Stellantis through the merger of Fiat Chrysler Automobiles and Peugeot SA back in 2021. The company quickly rose to prominence, producing recognizable brands such as Chrysler, Jeep, and Dodge. Under Tavares, the firm claimed remarkable profits, with last year reporting earnings of 18.6 billion euros (approximately $19.7 billion).
Despite these successes, Stellantis has faced recent turmoil, with the company reporting an alarming 17% drop in U.S. sales for the first nine months of 2024. Earlier this year, dealers voiced frustration with Tavares' decisions, which they felt were aimed at maximizing immediate profits, leaving the company vulnerable to current market conditions.
This year has unfolded poorly for the company, exacerbated by its delayed response to shifting market demands. Competitors like General Motors and Ford have adjusted their operations through aggressive pricing strategies and sales incentives, leaving Stellantis' inventory levels high. Consequently, Stellantis has had to lay off workers and curtail production, including putting on hold operations at its Illinois plant.
Market analysts have been concerned about Stellantis shifting dynamics, as the company grappled with regulatory pressure and the broader industry's electric vehicle (EV) transition. Although Stellantis initiated plans to advance its EV lineup, progress has lagged behind industry competitors. Tavares had previously outlined ambitious targets for reducing carbon emissions across the company's operations by the year 2038.
Despite some optimistic forecasts when Stellantis first emerged from the merger, the company seems to be struggling with more hurdles than anticipated, with its stock losing over 50% of its value this year alone. Recent challenges culminated with publicly voiced concerns from dealers who laid bare the company’s operational struggles, urging for immediate attention to counteract the detrimental impacts following years of profit-driven decisions.
The situation at Stellantis highlights not just the challenges faced by one automaker, but broader industry issues as legacy car manufacturers navigate their presence amid fast-evolving consumer demands and competition from innovative startups. The company's leadership transition will come under intense scrutiny as it aims to stabilize its operations and restore profitability moving forward without its long-time CEO at the helm.
Elkann now leads the interim executive committee, which includes the significant task of stabilizing organizational morale and refocusing strategic priorities during this transitional phase. The next steps for Stellantis will be closely watched, as appointing the right successor could either mend the rifts within the company or continue its struggle.