Stellantis' Transition: Carlos Tavares Resigns, What's Next?

Stellantis, the world's fourth-largest automaker, is facing a significant leadership change as its CEO, Carlos Tavares, has resigned. Tavares, who led the company since its creation through a 2021 merger between Fiat-Chrysler and Peugeot maker PSA, has been instrumental in making Stellantis one of the world's most profitable automakers. However, recent challenges, such as bloated inventories and profit nosedives, have led to his departure.

The company's Board of Directors, under the Chairmanship of John Elkann, accepted Tavares' resignation, stating that different views had emerged between the Board and the CEO. Stellantis' Senior Independent Director, Henri de Castries, acknowledged the importance of alignment between the reference shareholders, the Board, and the CEO, highlighting the need for a perfect balance to drive success.



Stellantis has confirmed its full-year 2024 guidance and established an Interim Executive Committee, chaired by John Elkann, to ensure the continued deployment of the Company’s strategy in the long-term interests of Stellantis and all of its stakeholders. The process to appoint the new permanent CEO is well underway and will be concluded within the first half of 2025. This transition period may influence strategic decisions, potentially leading to a re-evaluation of Stellantis' Dare Forward 2030 plan and a refocusing on the company's key business priorities.

The selection criteria for the new CEO will significantly shape Stellantis' future direction and performance. Given the recent performance challenges, it's likely that the Board will prioritize leadership with a strong track record in turnaround situations and a deep understanding of the automotive industry's complex dynamics. The new CEO should also have experience in managing diverse, global teams and be able to navigate the transition towards electrified and autonomous vehicles. Their ability to work effectively with reference shareholders and stakeholders will be crucial.



The new CEO's background and experience will determine their approach to addressing the company's operational challenges. If the successor is appointed from within Stellantis, they may bring an intimate understanding of the company's unique portfolio of brands and strategies. However, if an external candidate is chosen, they could bring fresh perspectives and novel approaches to Stellantis' problems. The new CEO's experience in specific areas, such as turnaround strategies, operational efficiency, or electric vehicle (EV) technology, will also play a crucial role in determining their approach to these challenges.

The appointment process could impact investor confidence and market sentiment towards Stellantis in the short and long term. In the short term, the uncertainty surrounding a new CEO might lead to volatility in Stellantis' stock price. However, the appointment of an interim executive committee should help maintain stability and continuity during this period. In the long term, the appointment of a new CEO could either boost investor confidence if the successor is seen as a strong leader with a clear vision, or dampen it if the choice is perceived as less suitable.

In conclusion, Stellantis' CEO Carlos Tavares' resignation marks a significant turning point for the company. As the Board works to appoint a new CEO, investors and stakeholders await the selection of a leader who can navigate the complex challenges facing the automotive industry and drive Stellantis' long-term success. The new CEO's background, experience, and approach to addressing operational challenges will be crucial in determining the company's future direction and performance.