Shares of automaker Stellantis (STLA) are down 7% after the company announced the abrupt departure of CEO Carlos Tavares.
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Tavares resigned over what’s being described as “different views” with the company’s board of directors. The world’s fourth-largest automaker, whose nameplates include Chrysler, Dodge, Jeep, Fiat and Peugeot, said its board accepted Tavares’ resignation and his departure is effective immediately.
Stellantis added that the process to select a new CEO is under way and that it expects to conclude the search in the first half of next year. Until then, the company said it will establish an interim executive committee led by chairman John Elkann.
Declining Sales at Stellantis
Tavares’ resignation comes less than two months after the company announced he would retire at the end of his contract in 2026. Tavares had led Stellantis since its creation through a 2021 merger of Fiat Chrysler Automobiles and PSA Groupe.
Since the merger, Stellantis has faced criticism for a lack of investments in new products, high prices, and extreme cost-cutting measures. The company lowered its annual guidance in September, a month before it reported a 27% year-over-year decline in third-quarter revenue.
U.S. Loan to the Automaker
News of Tavares’ resignation comes on the same day that the U.S. Energy Department said it is planning to loan up to $7.54 billion to a joint venture of Stellantis and Samsung SDI to help the companies build two electric vehicle lithium-ion battery plants in Indiana.
The conditional award still needs to be finalized and includes $6.85 billion in principal and $688 million in capitalized interest for the joint venture that seeks to build batteries for future Stellantis electric vehicles. STLA stock has declined 43% this year.
Is STLA Stock a Buy?
Stellantis stock has a consensus Hold rating among 20 Wall Street analysts. That rating is based on seven Buy, 11 Hold, and two Sell recommendations issued in the last three months. The average STLA price target of $14.98 implies 21.05% upside from current levels.
