Stellantis shares have steadied despite the sudden departure of legendary CEO Carlos Tavares, who was a key figure behind the company’s massive merger with Groupe PSA in 2021. Tavares’ exit has raised questions about the company’s strategy and direction, particularly after his vigorous opposition to European Union CO2 rules.
The Stellantis board announced that it would appoint a successor by mid-next year, with Chairman John Elkann taking over as interim CEO. Automotive News described Tavares as one of the most brilliant auto executives of his generation, thanks to his stewardship of the merger and ability to drive impressive profits through ruthless cost-cutting.
However, not everyone saw Tavares’ record in the same light. Investment researcher Bernstein noted that while he was celebrated for his successes, a single misstep could lead to spectacular failures. The company’s shares have already fallen 50% since March, and its recent profit warning includes a forecast of a cash burn of up to €10 billion in 2024.
Tavares’ departure is attributed to strategic disagreements with the board over declining sales and increased competition. His views on the EU CO2 rules, which insist on electric vehicles (EVs) by 2030 and 100% by 2035, were seen as a major point of contention. Tavares had previously railed against the regulations, arguing that politicians were dictating technology and pricing out average Europeans.
The company’s troubles in the US led to a profit warning last September, with a forecast of a cash burn of up to €10 billion in 2024. Investment bank UBS has maintained a positive outlook for Stellantis, citing its high degree of EV mix flexibility and strong product cadence.
As Stellantis navigates this tumultuous period, investors will be watching closely to see how the company regains momentum and implements its turnaround strategy.
Source: https://www.forbes.com/sites/neilwinton/2024/12/07/stellantis-shares-stabilize-as-investors-ponder-tavares-demise