Carlos Tavares has stepped down as CEO of Stellantis after nearly four years, amid falling sales of electric vehicles and increased competition from Chinese automakers.
Carlos Tavares, chairman of Stellantis and one of the main architects of the PSA-FCA merger, stepped down on Sunday, ending a nearly four-year tenure during a turbulent period for the automaker.
Tavares’ departure, two months after warning of a profit cut of almost 50% of Stellantis’ market value, highlights the difficulties older motorists face in making the transition to electric vehicles.
After tavares’ dismissal, Stellantis shares fell more then 7% in morning trading in Europe as investors reacted to apparent concerns about a leadership void and uncertainty about the automaker’s future strategy.
Enterprising goals, disappointing results
Tavares defended a 50 billion euro investment in electrification at Stellantis, with the aim of achieving 100% sales of battery electric vehicles in Europe by 2030.
However, neither sales nor expectations have fallen. According to Bank of America’s latest EV Tracker, Stellantis sold 173,400 electric vehicles in the first half of 2023, a number that fell to 157,700 in the first half of 2024 – a 9% drop from the previous year.
This fall coincided with Stellantis losing ground in the global tram market.
Stellantis’ global market share in the electric vehicle segment fell to 3.5% in the first half of 2024, compared to 5.3% in the first half of 2023, as Chinese manufacturers stepped up with competitive pricing and innovation.
These difficulties have caused Stellantis shares to fall nearly 50% this year and undermined confidence in Tavares’ leadership.
The departure of Tavares: what happens next?
Tavares was the highest paid car manager in 2023, with a compensation package of €36.49 million.
It was reported that the decision to leave was reached by unanimous agreement among Stellantis board members.
Although Stellantis praised Tavares for his contributions to the company’s founding and early success, internal disagreements between the board and the CEO played a key role in his departure.
Chairman John Elkann cited “differing opinions” on Stellantis’ direction as the catalyst for Tavares’ dismissal.
The Stellantis board of directors has already begun the search for the Portuguese successor, with the aim of completing the appointment in mid-2025, Elkann will chair a newly created executive committee, tasked with leading the company to during this transition phase.
Industry voices and reactions
The auto industry reacted quickly to Tavares’ departure.
On X (formerly Twitter), former CEO of Nissan and Aston Martin Andy Palmer praised Tavares as “perhaps the most professional automotive guy I’ve worked with”, emphasizing his role in the creation of Stellantis and the progress of an iconic car. Palmer said: “I hope the situation is good for him.”
Others, though, were less sympathetic. The Italian Senator Carlo Calenda criticized Tavares for his management approach, saying: “We will not miss Tavares. The defender of Darwinist theories that seem to only concern workers. Now it is more urgent to summon John Elkann to the Parliament.”
CNBC correspondent Michael Wayland noted: “Tavares misunderstood the North American market,prioritizing price and profits over size and investment. This alienated traditional consumers and diminished quality.”
Investment analyst brian Tycangco warned that Stellantis’ challenges reflect a wider trend, writing: “Traditional automakers are losing ground to Chinese electric vehicle brands, even in their most profitable markets. Innovation is no longer optional”.
What’s next for Stellantis?
Tavares’ departure highlights the difficulties car makers face when trying to transition from traditional combustion engines to electric powertrains.
Stellantis must now face stiff competition, falling sales of electric vehicles and the need to restore investor confidence.
German giants Volkswagen, BMW and Mercedes-Benz are facing similar headwinds, including falling electric vehicle market share and increasing Chinese competition.
with Elkann at the helm temporarily, Stellantis will be under immense pressure to find a leader who can balance innovation with operational excellence.
It is not yet known whether the next CEO will be able to change the situation of the company, but it is not only Stellantis, but also the European car sector in general, which is struggling to remain competitive in an electrified world.
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Interview: The Future of Stellantis and the Automotive Industry Post-Tavares
Editor: Welcome to Time.news. Today, we’re delving into the significant changes at Stellantis following the resignation of CEO Carlos Tavares. Joining us is automotive industry expert, Dr. Clara Martinez. Thank you for being here, Dr. Martinez.
dr.Martinez: Thank you for having me. It’s a pleasure to discuss such a crucial topic.
Editor: First off,Tavares’ departure comes as a surprise to manny. What do you think led to this decision? Was it solely based on the declining sales of electric vehicles?
Dr. Martinez: Tavares’ resignation is indeed a critical moment for Stellantis. While the falling sales figures certainly played a role, it’s crucial to recognize that his exit is emblematic of broader challenges faced by traditional automakers transitioning to electric vehicles (EVs). The competitive pressure from Chinese manufacturers and changing consumer preferences have compounded stellantis’ struggles. Tavares had set ambitious electrification goals with a €50 billion investment, but the drop in sales indicates a disconnect between strategy and execution.
Editor: Speaking of sales,reports indicated that Stellantis sold 173,400 electric vehicles in the first half of 2023,only to see that number plummet to 157,700 in the first half of 2024. How do you interpret this decline?
Dr. Martinez: That decline is quite troubling. It shows that Stellantis is losing market traction, notably at a time when competitors are ramping up their EV offerings.A 9% drop in a crucial growth area like EVs suggests that customers are not only turning away from Stellantis but perhaps opting for alternative brands that are offering more appealing products or better value. This is particularly relevant given the rapid advances and aggressive pricing strategies coming from Chinese manufacturers.
Editor: Stellantis’ global market share in EVs fell to 3.5%. How significant is this decline, and what does it signal for the company’s future?
Dr. Martinez: It’s significant. A drop from 5.3% to 3.5% in the EV market share means Stellantis is losing ground, and fast. This showcases the challenges traditional car manufacturers face in adapting to a rapidly evolving market. It signals to investors and consumers alike that Stellantis must accelerate its innovation and adaptability to stay relevant. If they can’t turn this around, they risk being left behind in a market that is increasingly favoring nimble, tech-savvy entrants.
Editor: After Tavares’ departure,investors reacted swiftly,with shares dropping more than 7% in morning trading. What does that suggest about the current sentiment towards Stellantis?
dr.Martinez: The immediate drop in stock prices reflects a lack of confidence from investors regarding Stellantis’ leadership and strategic direction. The uncertainty surrounding who will take the helm next and what new strategies will be implemented creates a vacuum that ofen spooks investors. They are looking for reassurance that the company will effectively navigate these turbulent waters and regain its footing in the EV market.
Editor: Considering the risks involved, what should Stellantis’ new leadership prioritize to regain consumer and investor confidence?
Dr. Martinez: The new leadership must focus on a few key areas: First,they need to streamline their electric vehicle portfolio to produce compelling models that resonate with consumers. Secondly, a clear communication style about goals and progress is vital to rebuilding trust with investors. Lastly, stronger partnerships and collaborations—especially with tech companies—could boost innovation and efficiency in their electrification efforts. It will also be crucial to adapt to new market trends and consumer expectations rapidly.
Editor: Dr. Martinez, thank you for yoru insights. It certainly seems like Stellantis has some crucial decisions ahead to reshape its future. We appreciate your analysis.
Dr. Martinez: Thank you! I look forward to seeing how this situation unfolds. It’s a pivotal moment for the automotive industry as a whole.