Carlos Tavares’s immediate demise was due to his ambitious sales and cost-cutting targets, which many board members deemed unrealistic and damaging to the company’s relationships with key stakeholders.
Sources close to the matter revealed that Tavares’ interactions with suppliers, dealers, and unions had grown increasingly contentious. His aggressive leadership style and focus on cutting costs—without considering the long-term implications—left the board feeling unsettled and alienated.
Tavares’ brash approach included blaming Stellantis’ U.S. management for declining sales and rising inventories at the Paris Motor Show in October, which annoyed several board members. In the following month, his confrontational stance became “totally untenable” for the board, which represents major shareholders such as Exor, the Peugeot family, and the French government. Tavares’ response to board members’ inquiries about his strategies was dismissive, further straining relations. His refusal to align with the board on key issues, including the company’s EV goals and cost-cutting measures in Europe, contributed to his ouster.
One of the major points of contention was Tavares’ handling of the European Union’s EV regulations. He rejected calls for a lobbying push to renegotiate the rules, opting instead to focus on avoiding fines. The board feared Stellantis would have to drastically reduce its combustion-engine vehicle sales to meet the 21% EV sales target by 2025, a significant jump from the current 12% share. Tavares’ radical targets and narrow focus on cost-cutting raised alarms, as his decisions were increasingly viewed as risky and unsustainable.
The abrupt departure of Tavares has sent shockwaves through the company, which is now searching for a new CEO to lead Stellantis through a challenging period. The automaker is grappling with bloated U.S. inventories, declining market shares, and rising competition from Chinese EV makers. Additionally, Stellantis is facing pressure to adapt to tough emissions standards in Europe and manage complex trade policies under the U.S. administration. The company’s shares have fallen by 43% this year, further highlighting the challenges ahead.
As Stellantis looks to stabilize its operations, the next CEO will inherit a daunting to-do list. The new leader will need to navigate tensions within the company, address regulatory hurdles, and find a way to restore investor confidence amidst rising competition and shifting industry dynamics.
