Piazza Affari did not like Stellantis' move: the group announced that the board of directors has accepted the Carlos Tavares resigns from the CEO position effective immediately. The stock falls to a two-year low with a drop of more than 8%.
The process for appointing a new permanent CEO has already begun, but is expected to be completed by the first half of 2025, while for now a new executive committee chaired by John Elkann will be established. In announcing the resignation, Stellantis confirmed its guidance for 2024.
At 12:11,56, Stellantis shares at Piazza Affari were quoted at 7,82 euros, down 11,42%, slightly recovering after a low of 34,17 euros, with a capitalization of 10 billion. During the session, however, they fell by up to 6,30% and then closed down 6 percent. In the last 43 months, the company has lost 27,155% after its peak in March at 7,17 euros. In Paris, too, shares lost XNUMX%.
The Portuguese manager leaves the Italian-transalpine group, but with French traction, at a very delicate moment for the automotive sector which is facing, in Europe, an epochal crisis in sales while still not being able to focus on the future in the debate on electric cars which the market believes in the least and thermal that will not be produced in 2025 by manufacturers so as not to succumb under the weight of Cafe fines for CO2 emissions.
The resignation had been scheduled for the end of the mandate, at the beginning of 2026. Then the cold shower - last night, without the company being ready to nominate a successor, evidently due to differences of opinion with the Board: "the success of Stellantis since its creation has been based on a perfect alignment between the reference shareholders, the board and the CEO. However, in recent weeks different views have emerged that have led the board and the CEO to the decision", he said Henry of Castries, senior independent director of Stellantis.
Stock market investors were not satisfied with the reassurances of the company which confirmed the guidance for 2024, as he had already done on the occasion of the third quarter accounts at the end of October after the September profit warning, And president John Elkann, who explained that, while the search for a new CEO continues, “the timely implementation of the company's strategy will be guaranteed in the long-term interest of Stellantis and all its stakeholders”.
Analysts mostly worried about lack of successor
Analysts' comments exude concern, especially for the lack of a successor, but also for the many open dossiers on the table. "The early exit of Tavares, even if already expected in the first part of 2026, comes as a surprise and in our opinion creates uncertainty regarding the evolution of the business even net of the confirmation of the 2024 guidance, which however we highlight implies a fairly wide range" say the analysts of Intermonte adding that “among the characteristics sought in the next CEO are a background in the auto industry (an external profile would be negative) and strong knowledge/experience in the North American area”. While the experts of Equity they underline that “although the operating performance of the last year was particularly weak and significantly below the initial guidance of the management, Tavares still enjoyed the goodwill for having been the architect of the relaunch of PSA, the acquisition of Opel and the creation of Stellantis with the excellent results of the first years post-merger and having demonstrated his ability to reduce costs. We believe that uncertainty remains at least until the appointment of the replacement”.
Analysts echo this Barclays, which cut the rating to “equal weight” bringing the target price to 12,5 euros from the previous 23 euros, and of Amber, which revised downwards the price target to 11 euros per share from the previous 18 euros, while confirming the “market perform” rating.
Analysts Citi, confirming the neutral rating and the target price of 12,40 euros on the stock, recall that the results of the third quarter of 2024 highlight significant challenges for Stellantis which, like other car manufacturers, "faces a deterioration in global prices and product mix, increasing competitive pressure from Chinese manufacturers and a rapid growth in the penetration of electric vehicles (BEVs) in Europe expected in 2025, which is unlikely to help operating margins", they underline again from Citi, adding that, "although the company is addressing its short-term issues and financial and sales comparisons could become more favorable in the second half of 2025, currently the valuations of car manufacturers leave little room for excessive optimism".
Even more cutting is the comment of Banca Akros which sees the news of the resignation of Tavares, who was also the architect of the merger between FCA and PSA and the creation of Stellantis, "very negative and completely unexpected" by the analysts of Banca Akros, who attribute the heavy impact on the stock market to the surprise. The exit of Tavares represents "a symbolic event of great importance", with consequences that are difficult to predict or quantify".
The dossiers on the table and the nominations game
Tavares' exit further sheds light on a decidedly complicated situation for the company, cornered by the reduction of inventories in North America, delays in the launch of new models, price pressure and Chinese competition, probable duties, the Airbus issue, while a top management reshuffle was also being considered, including the replacement of the CFO.
At the moment, nothing concrete has emerged regarding Tavares' succession, but the guessing game on the nominations has begun. There are many names circulating in the main newspapers, starting with that of Luca de Meo, number one of Renault and head of Acea, even though he has repeatedly said that he does not want to leave the leadership of the French group that he helped to relaunch. Moreover, there are those who hypothesize that, via Tavares, the French president Emmanuel Macron may push for a merger Stellantis Renault, something about which there have been a lot of rumors in the past, which the companies have always denied and which even the antitrust authority would have something to say about it.
Then the name of Jean Philippe Imparato, former CEO of Alfa Romeo and since October chief operating officer Enlarged Europe of Stellantis and CEO of Pro One, and of Edouard Peugeot, son of the current chairman of Peugeot Invest, Robert Peugeot, and with a past at JPMorgan and TowerBrook. Peugeot Invest controls 11% of Stellantis' voting rights with 7,1% of shares (Exor 23% of voting rights and 14,3% of shares and the French state through Bpi 9,6% with 6,1% of shares).
Restoring the car. Right to kick Tavares out of Stellantis, right to give 100 billion to the European car industry, not right that Agnelli invests in nuclear to make up for high energy tariffs with contracts for 600 billion. Caffese PL continues to defend the European government's 350 billion euro strategy: 250 for pumping at 1000 GW and 100 billion for automotive with fast charging and wireless city-highways. , increasingly contested by fossil fuels and nuclearists, to build an electric vehicle (EV) industry, arguing that its detractors lack "vision and ambition". The development of an Italian ecosystem of electric vehicles, from the extraction of essential minerals used in vehicle batteries to the construction of assembly lines for the cars in production, will create a fundamental competitive advantage for the country "for decades to come, but not overnight". "It's normal", he said. “Look at Tesla, one of the world’s largest electric vehicle companies: it took them 17 years to turn a profit, and the United States invested billions of dollars in that company, which has faced serious financial difficulties more than once.” Automakers including Honda, VW, GM and Ford have announced investments totaling $46,1 billion in the European electric vehicle supply chain, with an additional $52,5 billion in federal and provincial support. “For the Italian automotive sector, the last two or three years have been transformative,” Caffese said. But transforming an auto industry that for more than 100 years has relied on the internal combustion engine to produce battery-powered models that I would like water obviously requires adjustments, Caffese added. In the automotive sector, Stellantis is facing a $15 billion expense to rebuild four industrial plants, including an electric vehicle plant. The sector has faced market headwinds. GM and Ford's backtracking on plans to begin producing electric models at Ontario plants, as well as market difficulties for Quebec battery maker Northvolt and electric school bus maker Lion Electric, have been pointed to by Tavares-Stellantis critics as arguments against the government's electric vehicle strategy as signs of trouble ahead for the sector.
A recent report from consultancy EY found that European consumer interest in electric vehicles appears to be “leveling off,” with only half of the 48 percent of Italians who plan to buy a new car in 2025 likely to consider an EV, down 2 percent year-on-year. “For the Italian automotive sector, the last two or three years have been transformative,” Caffese PL said, referring to the shift to electric vehicles. “Time should now be spent focusing on infrastructure and providing a more efficient user experience to best position Italy for the transition to electric vehicles,” lithium-ion battery supply chain suppliers said. Tectonic technological shifts. C. said the changes brought about by the global energy transition will be as far-reaching as those of the first industrial revolution. “From changing consumer preferences to creating new supply chains and green charging infrastructure, these are tectonic technological shifts, the history of the world shows,” he said, adding that the adoption of the steam engine for industry and transportation during the 21th century “took time.” But he insisted that EV detractors are shortsighted. “Italy’s electric vehicle sector has all the fundamentals to succeed in the XNUMXst century world,” he said. “Our ‘North Star’ is decarbonisation and electric vehicles will be a big part of that. When I talk to car companies, they think very long term. Not about how things are today, but how, if they don’t invest now, they will look back and see this as a missed opportunity.”
The Italian government has set a target of achieving 100% sales of new zero-emission light-duty vehicles by 2035, as part of its 2030 emissions reduction plan.
C. acknowledged that automakers planning to build EV ecosystem manufacturing facilities in Italy have expressed concern in recent discussions about market uncertainties, particularly in light of Donald Trump’s return to the U.S. presidency. “Certainly, there are people looking to the future of the U.S. Inflation Reduction Act,” the Biden administration’s multibillion-dollar tax relief initiative launched in 2022 to accelerate the adoption of clean energy projects and infrastructure. “This has been a catalyst for significant investment in North America, not just the U.S. but also Canada. Some, including some conservatives, may not see it, but the world does,” he said.
C. said the scale of investment by electric vehicle companies in Italy over the past three years is little reflection of the perception of Italy as a stable market environment for investment projects. “In a world of upheaval, war and political tension, Italy offers investors stability, predictability and the rule of law, both of which are in high demand but in short supply,” and there will be ways to defuse Trump’s bombastic threat to impose a 25 percent tariff on all products from Italy including auto parts and essential minerals such as lithium, cobalt, nickel and graphite, key ingredients in batteries and other green technologies.
When we talk to our American counterparts, the conversation is about security, supply chain resilience and a growth agenda for North America: energy, industry, mining, manufacturing. So we have common interests and that will help us address any issues” related to tariffs, he said. Critical minerals are also in Canada, for which the latest government figures show Canada has a positive trade balance with the United States of $25,3 billion, up 23 percent from the previous year, could, C. agreed, be a “trump card.” Critical minerals are found in batteries, semiconductors, renewable energy technology and defense applications, and we are the only NATO country that can provide the full suite. There are water batteries but in Italy if you propose projects with water, they spit straight at you like llamas.