Stellantis CEO Carlos Tavares resigns amid bleak profit outlook, stocks slump 10%

Carlos Tavares stepped down on Sunday as the CEO of Stellantis, the world’s third-largest automaker, amid wide speculations of his departure. The auto giant accepted his resignation with immediate effect after “different views” between the board and the CEO emerged in recent weeks, the company said in a statement.

The share was trading at a low of 10.13% at 11.27 euros on Euronext Milan on December 2.

The resignation comes against the backdrop of the company witnessing falling profits and dropping sales in the current fiscal.

Tavares was initially set to retire in January 2026 after his five-year contract ended.

“... However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision,” Stellantis’ Senior Independent Director Henri de Castries commented.

In October this year, the automaker announced that it had begun searching for a new CEO. On Sunday, the company reiterated that the process of appointing a new chief executive is well underway and will be concluded by the first half of 2025.

The Amsterdam-based automaker stated that it has created an interim executive committee chaired by John Elkann to complete the process of appointing the new CEO.

Carlos Tavares

The 66-year-old Portuges and Stellantis’s former CEO started at Renault from where he climbed up the ladder to become the Chief Executive Officer at the Peugeot-Citroen Group in 2014.

He played a crucial role in establishing Stellantis in 2021 through the merger of Fiat Chrysler Automobiles with Peugeot-Citroen, and under his leadership, the newly established Stellantis was performing exceptionally well.

In the beginning, the company was churning out impressive profits on the back of quick investments in electric and hybrid vehicles. Additionally, the company could charge higher prices due to a shortage of computer chips.

However, soon the market stabilised at lower prices.

Stellantis’s sales vows

In September this year, Europe’s second-largest car manufacturer announced a 40% drop in its adjusted operating income (EBITDA) in the first half of 2024.

Additionally, the company’s sales from North America, its main source of profit, slumped 18% in the first half of the fiscal.

Europe’s second-largest and the world’s fourth-largest automaker by sales had pointed to weakening global demand and fierce competition from China as the reason for cutting its annual profit projections.

The company expected a negative cash flow of between 5 and 10 billion euros.

Last week, the company announced the closure of its factory in Luton, England which is expected to lead to the loss of 1,100 jobs. Production was also cut in France though the company promised not to close any factories.