Stellantis' Tavares resigns, leaving brand without CEO until next year

Stellantis CEO Carlos Tavares has resigned from the company following a sharp decline in profits and sales.

Driving the news: Stellantis had already begun searching for a new CEO in September, the same month Tavares revealed he had no plans to renew his contract with the brand when it ended in 2026. At the time, the automaker said the search was simply a part of succession planning and did not indicate the embattled executive was planning on ending his term early.

• On Sunday, the manufacturer announced its board had accepted Tavares’ immediate resignation.

• Stellantis Senior Independent Director Henri de Castries blamed the decision over “different views” that had emerged between the CEO, board and reference shareholders in recent weeks.

Looking back: Tavares’ rapid fall from grace is punctuated by the strong results returned in 2023.

• Last year, Stellantis was the world’s most profitable automaker, benefitting from high prices and the post-pandemic market’s limited vehicle availability. That success led to Tavares becoming the highest-paid automotive executive in the world.

• This year, however, those same factors seem to have played a role in the company’s downfall. For most of 2024, Stellantis brands have kept prices fixed even as other manufacturers have implemented aggressive incentives and discounts to fuel demand.

• This, combined with a sudden surge among China’s domestic automakers, caused the firm to lose market share at a global level.

Looking ahead: The company now plans to create an interim executive committee helmed by chairman John Elkann, who will lead operations until a new chief is appointed. Stellantis expects to wrap up its search for a new CEO within the first half of 2025.

• The automaker also reconfirmed its reduced financial guidance for this year over the weekend. While it has stressed that efforts to boost demand and recover lost profits were working, revenues were down 27% year-over-year in Q3.

Zooming out: Stellantis is far from being the only automaker to face leadership challenges and financial uncertainty.

• Nissan, for instance, saw profits collapse 85% from last year during the July-Sep. quarter.

• The similarities don’t stop there. Reports suggest the Japanese automaker may also be losing one of its top executives–CFO Stephen Ma, who has worked with the brand since 1996.

Bottom line: Stellantis’ board has yet to explain what difference in opinion led them to decide that vacating Tavares’ position before finding a replacement was better than retaining his services for another few months. Whatever the reason, the coming days will likely be challenging for the company as it scrambles to find a new CEO while also directing recovery operations across its brand lineup.

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