Carlos Tavares has run out of road at Stellantis just as the golden handshake of a 2026 retirement package started to appear on the horizon.
Tavares fell on his own sword after what Stellantis’s independent director, Henri de Castries, described as “different views” emerging in the company’s boardroom, leaving the 66-year-old Portuguese boss’s position untenable.
The unexpected nature of the announcement marks a suitably climactic end for one of Europe’s highest-paid CEOs, a man who showed an ability to turn around legacy carmakers with controversy along the way.
It seems fitting that Tavares, who has repeatedly espoused the benefits of this “Darwinism” in the car industry, should be the latest victim of its current upheaval.
‘Petrol head’ Tavares runs out of road
For all of his perceived faults that led to his abrupt, premature resignation, Tavares couldn’t be accused of going about his role as head of one of the world’s largest automakers in a half-hearted manner.
He was named one of Fortune’s 100 Most Powerful People in November thanks to his seemingly iron grip on a company that raked in almost $205 billion in revenue last year.
On his Automotive Life & Vision Facebook page, Tavares describes himself as a “petrol head.” He is pictured driving vintage racing cars and often attending car events on his weekends off.
A profile of Tavares in Le Monde in early 2023 encapsulated what made Tavares so successful in his early years, but also proved to be prophetic of his downfall.
France’s ex–Finance Minister, Bruno Le Maire, described to Le Monde Tavares’s love of all things automotive.
“He’s a real race-car driver, who knows the difference between a titanium bolt and an aluminum bolt,” Le Maire said. “He can turn down an appointment with a head of state because he has a race scheduled that day.”
Tavares was parachuted into the Peugeot-owning PSA Group in 2014 as the French automaker flirted with bankruptcy. His arrival at Peugeot followed a public battle at his former company, Renault, where he publicly pressured then–CEO Carlos Ghosn to cede more power.
He has been credited with Peugeot’s turnaround, which led to the merger with Fiat-Chrysler that created Stellantis, which Tavares was chosen to lead in 2021. Since the merger, Tavares has been well rewarded, scooping $77 million in compensation.
Pierre Moscovici, a former French finance minister, described Tavares to Le Monde as a “samurai, obsessed with work, demanding, cold, fast, and with a tremendous efficiency.”
This was exemplified by how Tavares ran Peugeot. His enthusiasm for cost-cutting and obsession with efficiency meant he butted heads at all levels of the company. While making PSA profitable, employee satisfaction declined. Le Monde reported a Kantar survey of 6.2 out of 10 for workplace well-being among Peugeot’s 260,000 employees.
Throughout his time leading carmakers, Tavares has talked about “Darwinism” in the auto industry, arguing only the strongest companies will survive. It’s a point he reiterated amid an influx of cheaper Chinese models to Europe.
It seems Tavares’s combative approach to business was a winning strategy while Stellantis was on top, but proved his Achilles’ heel as the carmaker battled falling revenues and profits.
Tavares was tapped to exit Stellantis in 2026 as part of a cushy retirement plan only announced in October, with the CEO also overhauling the carmaker’s global executive suite in a bid to turn around its falling fortunes in the meantime.
However, sources told Reuters that Tavares was pushed out over his revival plans, which focused on short-term cost cuts rather than the board’s ambitions for a longer strategic turnaround.
Reuters reported one source familiar with the matter who said Tavares was more concerned about securing his reputation before his 2026 retirement rather than working in the best interests of the company.
Stellantis problems remain
For Stellantis, the same issues that have tripped up its competitors remain: Falling global demand, the emergence of cheap Chinese competitors, and stuttered EV uptake caused Stellantis to issue a profit warning in September.
In the U.S., where Stellantis owns the Jeep and Ram brands, a premiumization push has been heavily criticized by analysts and dealers. The investment research group Bernstein accused Stellantis of having a “misplaced belief in its own pricing power,” with one Stellantis dealer saying the company had alienated its loyal customer base with six-figure price tags.
The carmaker’s market share in the U.S. has collapsed in the past couple of years from double-digit percentages to 7%, though there are hopes it will rebound.
However, investors don’t seem confident that Tavares was at the root of those problems. Shares in Stellantis fell as much as 8.9% in early morning trading in the wake of Sunday’s news.
For Tavares, meanwhile, a retired life in Portugal awaits, where he runs a vineyard and a vintage-car renovation company.
A representative for Stellantis didn’t immediately respond to a request for comment.
