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Stellantis CEO Carlos Tavares has resigned following a sharp decline in the world’s fourth-largest carmaker’s financial performance, marking the sudden departure of one of the auto industry’s most prominent leaders.
In a statement 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 left.
In September, Stellantis began a search for Tavares’ successor, but he was expected to finish his term as chief executive by early 2026.
Tavares joined Peugeot’s French owner PSA in 2014, rescued it from near-insolvency, and then helped create Stellantis by buying Germany’s Opel from General Motors in 2017. In 2021, there was a merger with Fiat-Chrysler worth 50 billion euros.
John Elkann, chairman of Stellantis, said: “We thank Carlos for his years of dedicated service and the role he played in building Stellantis.”
The company said the process of appointing a new chief executive will be completed by the first half of 2025. By then, a new interim executive committee headed by Elkann will be formed.
Henri de Castries, senior independent director of Stellantis, said the company’s success was based on a “perfect fit” between its shareholders, board of directors and chief executive.
“However, different views have emerged in recent weeks which have led the board of directors and the CEO to reach today’s decision,” he added.
People familiar with Tavares’ departure said there was growing tension between him and other Stellantis board members over how to get the company back on track after a sharp decline in reported profits in 2024 due to falling sales in the U.S. and Europe. Stellantis shares have fallen 43% this year.
“(Tavares) focused on the short term rather than the long term of the group and managed to piss everyone off in the process,” said one person familiar with the conversations between Stellantis board members.
A second person with knowledge of the deliberations 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 major cost-cutting, issued a profit warning in September. At the time, the company said its free cash flow in 2024 would be negative in the range of €5 billion to €10 billion.
Another person briefed on Tavares’ resignation said the situation inside Stellantis and with the company’s stakeholders, including suppliers and dealers in the U.S., had become tense.
Disgruntled factory workers in Italy and the US threatened to strike after production cuts.
Tavares did not immediately respond to a request for comment. The news that he is stepping down as CEO of Stellantis was first reported by Bloomberg.
On Sunday, Stellantis reaffirmed its financial guidance for 2024, including a target adjusted operating profit margin of 5.5 percent to 7 percent.
Bernstein analyst Daniel Roeska said Elkann has shown “good instincts” in the past in selecting a new chief executive.
He added: “We expect the board to consider both internal and external candidates, but the interim period will be challenging for both the company’s management and investors.”
In July, Tavares brushed off concerns about Stellantis’ performance, describing the drop in sales as a “bump in the road” and vowing to “fix” the problems.
In October, he led the restructuring of the company’s management brandsincluding Jeep, Maserati and Alfa Romeo.
The changes were seen by analysts as a sign that Tavares has no plans to step down before the end of his term.
At the time, he also clashed with the Italian government over subsidies for electric cars, as he threatened to move some Stellantis jobs at Italian factories overseas.
Tavares was lashed out by angry Italian lawmakers, and his response, blaming the tough regulatory environment, was seen as a lack of “humility,” said one person familiar with the matter.
Tavares’ departure comes days after Stellantis announced it was suspending production of the Fiat 500 EV and two Maserati models at its historic Mirafiori plant in Turin in December due to weak demand.
Last week, Stellantis blamed regulations on the sale of electric vehicles in the UK, announcing plans to close its van factory in Lutonwhich puts about 1,100 jobs at risk.
