Carlos Tavares has resigned as Stellantis CEO after almost 4 years, amid plunging electrical car gross sales and rising competitors from Chinese language automobile makers. His departure highlights the mounting challenges for legacy carmakers within the EV transition.
Carlos Tavares, the CEO of Stellantis and a key architect of the PSA-FCA merger, stepped down on 1 December 2024, ending an almost four-year tenure throughout a turbulent time for the automaker.
His exit, two months after a revenue warning wiped almost 50% off Stellantis’ market worth, displays the struggles confronted by legacy carmakers within the transition to electrical autos (EVs).
Within the wake of Tavares’ resignation, Stellantis shares tumbled by greater than 7% throughout early morning buying and selling in Europe, as traders reacted with evident concern over the management void and uncertainty surrounding the automaker’s future technique.
Formidable objectives, disappointing outcomes
Tavares had championed Stellantis’ €50bn electrification funding, aiming for 100% battery electrical car (BEV) gross sales in Europe by 2030.
Nevertheless, gross sales fell wanting expectations. In accordance with the newest Financial institution of America’s EV Tracker, Stellantis bought 173.4 thousand BEVs within the first half of 2023, a determine that dropped to 157.7 thousand within the first half of 2024 – a 9% decline year-on-year.
This droop coincided with Stellantis dropping floor within the international EV market.
Stellant’s international market share within the EV phase fell to three.5% within the first half 2024, in contrast with 5.3% within the first half of 2023, as Chinese language EV producers surged forward with aggressive pricing and innovation.
These struggles contributed to Stellantis shares tumbling almost 50% this yr and eroded confidence in Tavares’ management.
Tavares’ exit: What occurs subsequent?
Tavares was the highest-paid automotive supervisor in 2023 with a €36.49m compensation package deal.
The choice to half methods was reportedly reached with unanimous consensus amongst Stellantis’ board members.
Whereas Stellantis praised Tavares for his contributions to the corporate’s formation and preliminary success, inside disagreements between the board and the CEO performed a key function in his departure.
Chairman John Elkann cited “totally different views” on Stellantis’ route because the catalyst for Tavares’ resignation.
The Stellantis board has initiated a seek for Tavares’ successor, aiming to finalise the appointment by mid-2025. Within the interim, Elkann will chair a newly established government committee tasked with guiding the corporate by this transitional section.
Business voices and reactions
The automobile manufacturing sector has been fast to react to Tavares’ departure.
On X (previously Twitter), former Nissan and Aston Martin CEO Andy Palmer lauded Tavares as “maybe probably the most skilled automobile man I’ve labored with”, highlighting his function in creating Stellantis and creating iconic vehicles. Palmer added: “I hope historical past will likely be form to him.”
Nevertheless, others have been much less sympathetic. Italian senator Carlo Calenda criticised Tavares for his managerial method, stating: “We can’t miss Tavares. The proponent of Darwinian theories that solely appeared to use to staff. Now it is much more pressing to summon John Elkann to Parliament.”
CNBC correspondent Michael Wayland famous: “Tavares misunderstood the US market, prioritising pricing and earnings over quantity and investments. This alienated conventional shoppers and led to high quality declines.”
Funding analyst Brian Tycangco warned that Stellantis’ challenges mirror a broader development, writing: “Legacy automakers are dropping floor to Chinese language EV manufacturers even of their most worthwhile markets. Innovation is now not non-compulsory.”
What lies forward for Stellantis?
Tavares’ departure underscores the difficulties confronted by legacy automobile makers as they try to transition from conventional combustion engines to electrical powertrains.
Stellantis should now grapple with intensifying competitors, falling EV gross sales, and the necessity to rebuild investor confidence.
German giants Volkswagen, BMW, and Mercedes-Benz additionally face related headwinds, together with falling EV market share and rising Chinese language competitors.
As Elkann takes non permanent cost, Stellantis will likely be below immense stress to discover a chief able to balancing innovation with operational excellence.
Whether or not the subsequent CEO can reverse the corporate’s fortunes stays to be seen, however the stakes are excessive not just for Stellantis but in addition for the broader European car-making sector because it fights to stay aggressive in an electrified world.