Carlos Tavares resigns as Stellantis CEO amid board conflict

In early December 2024, Carlos Tavares, the CEO of Stellantis, stepped down from his position following significant disputes with the company's board of directors regarding his future strategies for the automaker. Tavares had been leading Stellantis since its inception in 2021, after the merger of Fiat Chrysler and Peugeot. His abrupt resignation came just over a year before the end of his contract and reflected the mounting frustrations between him and John Elkann, the chairman of Stellantis, who had taken temporary control after Tavares's departure. This tension indicated a fundamental disagreement concerning the direction of the company, as Tavares was perceived to focus on urgent, short-term solutions rather than ensuring the long-term viability of Stellantis's various brands. The resignation occurred amid significant financial challenges for Stellantis, notably a drastic drop in share prices, approximately 60% since the spring. Following Tavares's exit, the company's shares fell by more than 8%, indicating investor concern over the lack of leadership at a critical point. The board had expressed worries about Tavares's focus on the brands' financial performance, especially for underperforming brands like DS and Alfa Romeo, which led to worries over their future within the conglomerate. This heightened scrutiny played a considerable role in his ousting, as the board sought a leader more aligned with a long-term strategy of stability and growth. With Tavares at the helm, Stellantis had aimed for a robust consolidation of its 14 brands, from Jeep to Citroen. However, the recent financial results had drawn criticism, particularly the downturn in profitability within the North American sector. Tavares's management style, which relied on a large executive team of 35, was also overhauled by Elkann—aiming for a more streamlined, efficient structure. While this leadership transition creates uncertainty regarding Stellantis's strategic direction, the board has already begun the search for a new CEO. The ambition is to mitigate investor concerns and establish a solid foundation for the future. Up until Tavares's exit, the discussions around Stellantis’s future were entwined with broader market dynamics and the necessity of adapting to changing automotive industry landscapes, including advancements in electric vehicles and global competitiveness. Thus, the inevitable restructuring following Tavares's departure may present both challenges and opportunities for Stellantis moving forward.