Carlos Tavares, CEO of Stellantis since its formation in 2021, has resigned, with the company’s board accepting his decision. Initially planning to step down in 2026, Tavares advanced his departure amidst mounting tensions with shareholders and declining profits and sales, particularly in Northern Europe. His leadership, while praised for cost management, faced criticism for lacking ambition and failing to keep pace with competitors. Stellantis, which emerged from the 2021 merger of PSA Group and FCA, has seen market share shrink due to a limited focus on new model development.
In a statement, Stellantis announced that a special board committee is overseeing the search for a permanent CEO, with the process expected to conclude by mid-2025. Until then, an interim executive committee, led by John Elkann, will steer the company. This leadership change comes as Stellantis grapples with significant challenges, including a steep 19.8% drop in U.S. sales for Q3 2024 compared to the previous year. The company had previously issued a profit warning, revising its operating margin forecast down to 5.5%-7%, a sharp decline from earlier estimates above 10%. The announcement triggered a 14% drop in its stock value.
Tavares’ tenure has drawn strong criticism in Italy, particularly from unions and government officials, for insufficient production within the country and relocating operations abroad. Promises to boost Italian manufacturing to one million vehicles by 2030 lacked a detailed plan, and 2024’s output is expected to fall below 500,000 vehicles—one of the lowest levels in 20 years. Meanwhile, suppliers have faced closures and layoffs as demand dwindles, exacerbating economic pressures. Tavares consistently argued that declining domestic demand necessitates government incentives for new vehicle purchases, especially electric models, to sustain production and jobs.
