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Carlos Tavares, the CEO of Stellantis and a key architect of the PSA-FCA merger, stepped down on 1 December 2024, ending a nearly four-year tenure during a turbulent time for the automaker.

His exit, two months after a profit warning wiped nearly 50% off Stellantis' market value, reflects the struggles faced by legacy carmakers in the transition to electric vehicles (EVs).

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In the wake of Tavares' resignation, Stellantis shares tumbled by more than 7% during early morning trading in Europe, as investors reacted with evident concern over the leadership void and uncertainty surrounding the automaker’s future strategy.

Ambitious goals, disappointing results

Tavares had championed Stellantis' €50bn electrification investment, aiming for 100% battery electric vehicle (BEV) sales in Europe by 2030.

However, sales fell short of expectations. According to the latest Bank of America's EV Tracker, Stellantis sold 173.4 thousand BEVs in the first half of 2023, a figure that dropped to 157.7 thousand in the first half of 2024 - a 9% decline year-on-year.

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This slump coincided with Stellantis losing ground in the global EV market.

Stellant's global market share in the EV segment fell to 3.5% in the first half 2024, compared with 5.3% in the first half of 2023, as Chinese EV manufacturers surged ahead with competitive pricing and innovation.

These struggles contributed to Stellantis shares tumbling nearly 50% this year and eroded confidence in Tavares’ leadership.

Tavares' exit: What happens next?

Tavares was the highest-paid automotive manager in 2023 with a €36.49m compensation package.

The decision to part ways was reportedly reached with unanimous consensus among Stellantis' board members.

While Stellantis praised Tavares for his contributions to the company’s formation and initial success, internal disagreements between the board and the CEO played a key role in his departure.

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Chairman John Elkann cited "different views" on Stellantis' direction as the catalyst for Tavares' resignation.

The Stellantis board has initiated a search for Tavares' successor, aiming to finalise the appointment by mid-2025. In the interim, Elkann will chair a newly established executive committee tasked with guiding the company through this transitional phase.