Stellantis shares fell 8% on Monday following the unexpected resignation of CEO Carlos Tavares.
Tavares, who had served as Stellantis’ CEO since its creation in 2021, stepped down immediately, citing differences with the board over the company’s strategic direction.
In a statement, Henri de Castries, Stellantis’ senior independent director, remarked,
Recent weeks have revealed differing views between the CEO and the board, prompting today’s decision.
The automaker, Europe’s second-largest, has seen its stock plummet 46% this year amid a sharp decline in sales across its core markets of Europe and North America.
The automaker has announced plans to appoint a new CEO by mid-2025.
Challenges facing Stellantis
Stellantis has faced a difficult 2024, with a 27% drop in third-quarter revenue to €33 billion.
This decline was driven by reduced shipments in Europe and North America, key markets for brands such as Jeep, Peugeot, and Fiat.
Analysts have also pointed to deeper structural challenges, including a stalled electric vehicle strategy and the discontinuation of key models without adequate replacements.
Reports suggest that Tavares’ focus on short-term fixes alienated both stakeholders and the board.
“[Tavares] was focusing on the short term rather than the group’s longer-term and managed to anger everybody in the process,” a source told the Financial Times.
What do analysts say?
The sudden leadership change has heightened investor anxiety.
In a research note today, JP Morgan said, “This sets an unprecedented challenge for investors looking to invest in a firm with such volatility in the management team.”
With such a turnaround in the top management team, question marks may be raised as the market will in our view price in no major earnings improvement in FY25.
Equita analysts emphasized that Tavares’ resignation injects uncertainty at a pivotal time, as the company contends with potential US tariffs, delays in launching new models, and ongoing efforts to streamline its North American inventories.
Citi analysts highlighted that Stellantis is grappling with significant challenges, including a declining car market and intensifying competition from Chinese automakers.
Stellantis now faces the task of stabilizing operations and restoring investor confidence.
A mixed legacy of transformation
Known for his cost-cutting prowess, Tavares earned praise for revitalizing PSA Group before its merger with Fiat Chrysler Automobiles to form Stellantis.
However, his tenure at Stellantis has been overshadowed by declining market share, bloated inventories, and quality issues.
While the board had previously expressed unanimous support for Tavares to remain until 2026, these mounting challenges ultimately led to his early exit.
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