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Stellantis CEO Carlos Tavares has resigned following a sharp drop in financial results at the world’s fourth-largest automaker, marking the abrupt departure of one of the auto industry’s most prominent leaders.
In a statement issued on Sunday, Stellantis, which owns the Peugeot, Fiat and Jeep brands, said the company’s board of directors had accepted Tavares’ resignation, without explaining exactly why he stepped down.
Stellantis launched a search for Tavares’ successor in September, but he was expected to finish his term as CEO by early 2026.
Tavares joined French Peugeot owner PSA in 2014, rescuing it from near-bankruptcy, then helped create Stellantis by buying Germany’s Opel from General Motors in 2017. A €50 billion merger with Fiat-Chrysler followed in 2021.
John Elkann, chairman of Stellantis, said that “our thanks go to Carlos for his years of dedicated service and the role he played in the creation of Stellantis”.
The company said the process of appointing a new CEO will be concluded by the first half of 2025. By then, a new interim executive committee will be formed and led by Elkann.
Henri de Castries, senior independent director of Stellantis, said the company’s success was rooted in the “perfect fit” between shareholders, management and the CEO.
“However, different views have emerged in recent weeks that have resulted in today’s decision by the board and the CEO,” he added.
People familiar with Tavares’ departure said tensions were mounting between him and other Stellantis executives over how to get the company back on track after a sharp drop in reported profits in 2024 due to falling sales in the US and Europe. Stellantis shares have fallen 43 percent this year.
“(Tavares) focused on the short term rather than the long term of the group and managed to anger everyone in the process,” said one person familiar with the discussions among Stellantis board members.
Another person familiar with the discussions added: “There was a sense that Carlos was moving too quickly to restore his reputation at the risk of creating problems in the future.”
Stellantis, which built a strong balance sheet through sweeping cost-cutting, issued a profit warning in September. The company said at the time that its free cash flow would be negative in 2024, in the range of 5 to 10 billion euros.
Another person familiar with Tavares’ resignation said the situation inside Stellantis and with the company’s stakeholders, including suppliers and dealers in the US, has become tense.
Disgruntled factory workers in Italy and the US have threatened to strike following production cuts.
Tavares did not immediately respond to a request for comment. The news of the departure of Stellantis CEO was first reported by Bloomberg.
On Sunday, Stellantis reaffirmed its financial guidance for 2024, including its target for an adjusted operating profit margin of 5.5 to 7 percent.
Bernstein analyst Daniel Roeska said Elkann has shown “good instincts” in the past when selecting a new CEO.
He added: “We would expect the board to consider a combination of internal and external candidates, but the transition period will be difficult for both the company’s management and investors.”
In July, Tavares dismissed concerns about Stellantis’ performance, describing the drop in sales as a “bump in the road” while promising to “fix” the issues.
In October, he oversaw a management change at the company brandsincluding Jeep, Maserati and Alfa Romeo.
Analysts interpreted the changes as a sign that Tavares does not plan to step down before the end of his term.
At the time, he also clashed with the Italian government over subsidies for electric vehicles, as he threatened to move some of Stellantis’ operations from its Italian factories to locations abroad.
Tavares was attacked by angry Italian lawmakers, and his response, which blamed the difficult regulatory environment, was seen as a lack of “humility”, said one person familiar with the matter.
Tavares’ departure comes just days after Stellantis announced it was suspending production of the Fiat 500 EV and two Maserati models at its historic Mirafiori plant in Turin during December due to weak demand.
Last week, Stellantis blamed UK rules on the sale of electric vehicles after it announced plans to close its van factory in Lutonputting about 1,100 jobs at risk.
