- Stellantis is searching for someone to replace Carlos Tavares.
- The new CEO isn't expected to start work until January 2026 when Tavares' current contract ends.
- Tavares won't be replaced earlier than scheduled, and might actually not be replaced at all.
To say things aren't running smoothly at Stellantis would be an understatement. The automotive conglomerate's net profit in the first half of 2024 plummeted by 48% due to weaker demand. Dealers in the United States (where sales dropped by 16%) are blaming Carlos Tavares for the "disaster" and the "rapid degradation" of the American brands. When the current CEO's contract expires in January 2026, it might not be renewed.
In an interview with Bloomberg, Stellantis chairman John Elkann confirmed the search has started for a new CEO. Elkann, who is also the chairman of Ferrari, didn't rule out a renewal of Tavares' contract after the existing five-year deal runs its course. As a refresher, Tavares was named Stellantis CEO when FCA and PSA merged in January 2021 to create the world's fourth-largest automaker.
Although the temptation would be to believe Stellantis is preparing to overthrow Tavares, Bloomberg cites sources close to the matter saying that won't happen. A spokesperson for Stellantis said it's "normal" to start the search process, adding that it might not have "an impact on future decisions" because Tavares could stick around beyond January 2026.
Stellantis has 14 car brands under its corporate umbrella, all of which will stay there at least until the end of the decade. The automotive juggernaut recently reiterated its commitment to sticking to its plan, which was announced in 2021, to invest in all companies for 10 years. However, it was only a couple of months ago when Tavares threatened to drop unprofitable brands: "If they don't make money, we'll shut them down. We cannot afford to have brands that do not make money."
While companies such as DS Automobiles, Lancia, and Chrysler are known to be struggling, Maserati isn't in a good place either. Deliveries to customers decreased by over 50% in the first half of the year, with Tavares putting the blame on inefficient marketing: "If sales are sluggish right now, it is a matter of marketing. We have also improved a lot on the quality front, but now we need to work on marketing. We lack prospects and leads, we need to reach potential customers and deliver the right message for the right positioning."
At Ram, there are quality concerns. Tavares pointed the finger at the Sterling Heights factory in Michigan where too many newly built 1500 pickups need to go through repairs right after leaving the assembly line. The 66-year-old executive also believes Ram didn't have the inventory it needed to sell more trucks than it did through June.
A cooling EV market has forced Stellantis to halt production of the 500e for four weeks. Even though the current generation of the city car is electric-only, that'll change in 2026 when Fiat will start sales of a hybrid version with a gasoline engine.
Having so many brands is a huge undertaking and finding a replacement for Tavares won't be easy. Stellantis has about 15 months to hunt for a successor unless the Portuguese businessman will convince the higher-ups he should continue as CEO. That seems unlikely given the current situation but let's wait and see how this plays out.
