Carlos Tavares’ contract is set to expire in January 2026 and may not be renewed
To say that things are not going well at Stellantis would be an understatement. The automotive conglomerate’s net profit for the first half of 2024 plummeted by 48% due to declining demand. In the United States, where sales fell by 16%, dealers are blaming Carlos Tavares for the ‘disaster’ and ‘rapid decline’ of American brands. Given the current situation, his contract, which expires in January 2026, may not be renewed.
In a recent interview with Bloomberg, Stellantis chairman John Elkann confirmed that the search for a new CEO has begun. Elkann, who also chairs Ferrari, did not rule out the possibility of renewing Tavares’ contract after the current five-year agreement ends. For context, Tavares became Stellantis CEO when FCA and PSA merged in January 2021, forming the world’s fourth-largest automaker.
Stellantis encompasses 14 car brands, all of which will remain under its umbrella at least until the end of the decade. The automotive giant recently reaffirmed its commitment to a 10-year investment plan announced in 2021. However, just a few months ago, Tavares warned that unprofitable brands could be dropped: ‘If they don’t make money, we’ll shut them down. We cannot afford to have brands that do not generate profits.’
While brands like DS Automobiles, Lancia, and Chrysler are facing challenges, Maserati is also struggling. Deliveries fell by over 50% in the first half of the year, with Tavares attributing the decline to ineffective marketing: ‘If sales are sluggish right now, it’s a marketing issue. We’ve made significant improvements in quality, but now we need to focus on marketing. We lack prospects and leads; we need to connect with potential customers and communicate the right message for proper positioning.
At Ram, there are concerns about quality. Tavares pointed to the Sterling Heights factory in Michigan, where a significant number of newly built 1500 pickups require repairs shortly after leaving the assembly line. The 66-year-old executive also noted that Ram lacked the necessary inventory to sell more trucks through June.
Additionally, a cooling EV market has led Stellantis to pause production of the 500e for four weeks. Although the current generation of this city car is electric-only, that will change in 2026 when Fiat introduces a hybrid version with a gasoline engine.
Managing so many brands is a substantial challenge, and finding a successor for Tavares won’t be easy. Stellantis has about 15 months to search for a replacement unless the Portuguese executive can persuade the higher-ups to extend his tenure as CEO. Given the current circumstances, this seems unlikely, but we’ll have to wait and see how it unfolds.
