Automaker Stellantis (STLA) announced the sudden exit of its CEO Carlos Tavares. This unexpected departure comes less than two months after the company stated that Tavares would retire in early 2026. This decision, driven by differing views between Tavares and the company’s board, comes as STLA faces a challenging period due to declining sales and high inventories.
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STLA has already initiated a search for a new CEO to lead the company and seeks to appoint a successor in the first half of 2025. In the interim, a new executive committee, led by Chairman John Elkann, will oversee the company’s operations.
Tavares Faced a Challenging Tenure at Stellantis
Tavares’ tenure at Stellantis, which began with the merger of Fiat Chrysler Automobiles and PSA Group in 2021, was marked by challenges. The company faced declining sales and profits in North America, once a major revenue driver, due to increasing competition and broader market shifts.
It is worth highlighting that in September, the company issued a profit warning, citing declining North American sales. That included a forecast of a cash burn between €5 billion and €10 billion ($5.58–$11.17 billion) and an adjusted operating profit margin between 5.5% and 7% for the year, down from the prior guidance of a “double-digit” margin.
While Tavares made promises to fix the situation and replaced his finance chief and other executives, STLA’s market share continued to decline in key markets, including France. Additionally, recent cost-cutting measures, including layoffs and factory closures, strained his relations with labor unions.
Is STLA a Good Stock to Buy?
Given the ongoing challenges, STLA has a Hold consensus rating based on seven Buys, 11 Holds, and two Sells assigned in the last three months. At $14.98, the average Stellantis price target implies a 13.48% upside potential. Shares of the company have declined about 39.51% year-to-date.
