Stellantis shares fell 7% to €11.65 on Monday after CEO Carlos Tavares announced his immediate resignation.

The unexpected departure of the 66-year-old Portuguese executive, who was due to leave in 2026, follows reported boardroom disagreements over the group’s response to falling profits. Chairman John Elkann will lead an interim executive committee until a new CEO is appointed in mid-2025.

Tavares’ Tenure: From Ambition to Struggles

Tavares, instrumental in merging PSA and FCA to form Stellantis, spearheaded a €50 billion electrification drive aiming for 100% battery electric vehicle (BEV) sales in Europe by 2030.

However, BEV sales fell short. Stellantis sold 173,400 BEVs in the first half of 2023, dropping 9% to 157,700 in the same period of 2024, according to the Bank of America’s EV Tracker.

The automaker’s struggles mirror industry-wide challenges as legacy carmakers adapt to the electric vehicle market.

Industry Reaction

The automotive world reacted strongly to Tavares’ exit. Former Nissan and Aston Martin CEO Andy Palmer praised him as “the most professional car guy I’ve worked with.”

However, critics emerged. Italian senator Carlo Calenda criticised Tavares’ management, saying, “We won’t miss Tavares. His Darwinian theories only applied to workers. John Elkann must address Parliament.”

Investment analysts pointed to broader issues. “Legacy automakers are losing ground to Chinese EV brands. Innovation is no longer optional,” warned Brian Tycangco.

Metal workers went on strike in October over falling production in Italy.

A New Era for Stellantis

Stellantis faces mounting competition from Chinese automakers and declining sales across key markets. Elkann acknowledged internal disagreements as a factor in Tavares’ resignation and pledged to steer the company forward during this transitional period.

The search for a new CEO, expected to conclude by mid-2025, will be critical for rebuilding investor confidence and ensuring Stellantis remains competitive.

The Road Ahead

Stellantis’ challenges reflect the growing pains of an industry navigating the shift to electric mobility. As European carmakers face intensifying global competition, the company’s next leader must consider all angles to secure its future. The market will be keeping a close eye on the value of Stellantis shares.