Carlos Tavares, the CEO of Stellantis, has resigned with immediate effect following a boardroom dispute, marking a dramatic shift for the global carmaker behind brands such as Vauxhall, Jeep, Fiat, and Peugeot. His departure comes just two months after the company issued a profit warning and a week after it announced the closure of its Vauxhall van-making plant in Luton, putting 1,100 jobs at risk.
Tavares, who built his reputation as a tough cost-cutter, had led Stellantis since its formation in 2021 following the merger of PSA Group and Fiat Chrysler. Under his leadership, the company initially thrived, but recent struggles have overshadowed his tenure. Stellantis has faced a sharp drop in sales, particularly in North America, where unsold vehicles have piled up, highlighting a mismatch between the company’s production and shifting consumer preferences.
Henri de Castries, Stellantis’ senior independent director, confirmed Tavares’ resignation, stating that recent differences in views between the CEO and the board led to the decision. “Stellantis’ success has been rooted in a perfect alignment between shareholders, the board, and the chief executive, but that alignment has been disrupted in recent weeks,” de Castries said.
Tavares’ career had been defined by his ability to turn around troubled companies. Before joining PSA, he worked at Renault under Carlos Ghosn and was credited with rescuing PSA from the brink of bankruptcy. However, critics argue that Tavares’ aggressive cost-cutting strategies, which included delaying product launches and focusing on efficiency at the expense of quality, may have contributed to Stellantis’ recent troubles.
The company’s sales slump in North America, combined with a stale product lineup, rising inventories, and declining market share, led to widespread dissatisfaction among stakeholders, including dealers, suppliers, and investors. Stellantis’ share price has fallen by 40% this year, underperforming its competitors, and dropped more than 9% following Tavares’ resignation.
Tavares had already announced plans to step down in 2026, but his premature exit now leaves Stellantis searching for a new CEO. The company expects to appoint a successor by mid-2024, with interim leadership headed by John Elkann, the chairman of Stellantis and a member of the Agnelli family.
Tavares had previously raised concerns about the future of Vauxhall’s operations, particularly in light of Brexit and government policies promoting electric vehicles. The closure of Stellantis’ Luton plant, which currently manufactures petrol and diesel vans, remains a key issue. While the company plans to shift electric van production to its Ellesmere Port facility, it is unclear whether Tavares’ departure will impact the Luton closure.
As Stellantis navigates a shifting automotive landscape, including increasing competition from Chinese manufacturers, the company’s future direction will depend heavily on its new leadership.
