Stellantis and Ferrari at a Governance Crossroads: How the Elkann Tax Settlement Could Redefine Automotive Power Dynamics

The Elkann siblings' July 2025 tax settlement marks a pivotal moment for two of the world's most storied automotive brands: Stellantis and Ferrari. By agreeing to pay €175 million to resolve an inheritance tax dispute over their late grandmother's estate, the family avoided a criminal conviction—but not the scrutiny that threatens their grip on the companies. This resolution, while closing one legal front, leaves Exor NV, the Agnelli family holding company, in a precarious position. For investors, the settlement underscores a deeper question: Can the fractured Agnelli dynasty retain control over Stellantis and Ferrari without undermining their long-term value? The answer hinges on governance reforms, strategic pivots, and whether the family can separate its legal liabilities from the brands' financial futures.

Governance Vulnerabilities: A Fractured Dynasty's Toll

The Elkanns' legal woes are not merely personal—they are systemic. Exor's ownership of 30% of Stellantis and 25% of Ferrari means governance risks for the family directly translate into risks for these companies. The unresolved criminal probe into alleged residency fraud to evade inheritance taxes has already frozen €75 million in family assets, raising questions about Exor's liquidity. For Stellantis, already grappling with a €2.1 billion annualized operating loss in early 2025, such pressures amplify existing challenges like declining revenues and a sluggish EV transition.

The family's internal conflicts—rooted in the 2019 inheritance dispute—have eroded the unity that once defined the Agnelli dynasty. This fragmentation could lead to divided leadership at Stellantis, where John Elkann's authority as chairman is increasingly questioned. Shareholders, particularly institutional investors, may demand greater transparency and independent oversight. A reveals a steady decline for STLA, down ~25% over two years, while RACE has held steady but faces volatility tied to governance concerns.

Strategic Crossroads: Stellantis's Survival and Ferrari's Fragile Mystique

Stellantis's financial struggles are well-documented, but its governance issues now loom larger. The automaker's EV transition, critical to its survival, requires billions in investment. If Exor's legal liabilities drain liquidity or deter capital partners, Stellantis risks falling further behind rivals like Tesla and BMW. The company's recent push to cut costs and simplify its brand portfolio may be insufficient without a stable governance foundation.

Ferrari, meanwhile, faces a different dilemma. Its brand equity relies on the mystique of Agnelli family stewardship—but that same mystique is now tarnished. Investors may pressure Exor to spin off Ferrari or cede control to a neutral board, ensuring the supercar maker's independence. Such a move could unlock value by severing Ferrari's ties to familial legal battles. However, without clarity on the criminal investigation, Ferrari's premium valuation (currently trading at ~9x forward EV/Sales) remains at risk.

Opportunities in the Chaos: Governance Reforms and Strategic Realignments

The tax settlement presents a rare opening for positive change. If Exor moves swiftly to bolster transparency—such as publishing detailed governance reforms or separating legal entities for Stellantis and Ferrari—it could stabilize investor confidence. For Stellantis, a governance overhaul might attract strategic partners or investors to fund its EV shift. For Ferrari, an independent governance structure could strengthen its appeal to luxury investors and preserve its brand's “exclusive” aura.

The Elkanns' resolution also highlights a broader opportunity: redefining family control in legacy automakers. In an era where EVs and software define competitiveness, rigid governance structures rooted in old-world dynasties may no longer suffice. Investors could push Stellantis to adopt more agile governance models, akin to Tesla's direct-to-consumer approach, while Ferrari might benefit from a hybrid structure that balances family legacy with professional management.

Investment Implications: Proceed with Caution

For now, the risks outweigh the opportunities. Stellantis's governance distractions and weak financials make it a high-risk play. Investors might consider shorting STLA or underweighting its stock until Exor demonstrates meaningful reforms. Ferrari's stock, while less exposed to operational losses, carries governance-linked tail risks. A would reveal its vulnerabilities. Until the Turin investigation concludes and Exor commits to transparency, RACE is best held by those willing to bet on Ferrari's brand resilience.

The smarter move? Look to competitors with clearer governance trajectories. Tesla's (TSLA) founder-driven structure, despite its own challenges, offers a contrast to Stellantis's familial entanglements. Meanwhile, BMW's (BMW) decentralized decision-making and strong EV pipeline highlight governance models that could outpace legacy players.

Conclusion: A New Era for Automotive Titans

The Elkann tax settlement is not an endpoint but a warning shot. The Agnelli dynasty's grip on Stellantis and Ferrari is fraying, and investors must decide whether to bet on a comeback or pivot to more agile rivals. For the family to retain control, governance must evolve—from opaque dynastic rule to a structure fit for a high-tech, fast-moving industry. Until then, caution reigns.

Investment recommendation: Maintain a neutral stance on Stellantis (STLA), consider a limited position in Ferrari (RACE) with governance reforms as a key condition, and favor competitors with clearer governance and EV strategies like Tesla (TSLA) or BMW (BMW).