Trust in OEM leadership: A look at Toyota, Stellantis and Tesla

Automakers are facing something of an identity crisis as confusing decisions, scandals and inconsistent sales have eroded trust in executive leadership.

Why this matters: Trust between a car manufacturer and its stakeholders, whether they be dealer, consumer or investor, is critical to its success. While many brands have defended their positive public image, confidence in the most high-profile automakers is starting to wane, placing their future success in doubt.

Let’s take a look at three current examples of declining confidence in OEM leadership:

Toyota

• Last year, Toyota was forced to admit, following an investigation, that it had been cheating in various safety certification tests affecting a range of models, including some exported overseas, for years. 

• The scandal has only deepened in the months since, culminating in the raiding of the company’s headquarters earlier this month by Japan’s transport ministry.

• While he is no longer the CEO, much of the blame has focused on the founder’s grandson and current chairman Akio Toyoda.

• Two major proxy firms, Institutional Shareholder Services (ISS) and Glass Lewis, have urged shareholders to vote against Toyoda in tomorrow’s re-election vote.

Stellantis

• For nearly six years, sales across Stellantis’ litany of brands have declined in North America, even as demand has risen for its competitors.

• Four major executives from the brand’s U.S. branch have resigned since the start of 2024, including former vice president of retail sales Jason Stoicevich, who left just two months into his new position.

• As a result, of these departures and worsening sales, confidence in the brand’s ability to turn things around has fallen to an all-time low.

Tesla

• Although company shareholders recently approved Tesla CEO Elon Musk’s massive pay package last week in a resounding vote of support for his leadership, many major investors, along with proxy firms Glass Lewis and ISS, advised voting against the executive’s compensation plan, citing concerns over his recent behaviors and multiple commitments.

• The company’s sales and profitability have also been declining, as demand for electric vehicles has started to stagnate.

• Musk’s focus, however, appears to be on other areas, such as robotaxis and artificial intelligence.

Bottom line: While trust in automotive leadership is deteriorating at these brands, their fates aren’t set in stone. Toyota reported its most profitable year in 2023 and Stellantis continues to rank as one of the world’s top automakers in terms of sales. Tesla also remains the EV market’s dominant player, despite the intensified competition in the segment. But the goodwill these companies have built with their supporters can only go so far. Reestablishing trust will be key in the years ahead.

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