Stellantis CEO Carlos Tavares under Scrutiny: A Challenge of a Special Kind

Carlos Tavares, CEO of Stellantis, enters the stage of the Paris Auto Show with a packed schedule to smooth things over after a drastic profit warning in late summer shocked investors. Despite announcing his resignation in 2026, Tavares plans to do everything possible over the next 18 months to regain investor confidence. Investors had become accustomed to high margins driven by profitable sales of pickup trucks and Jeep models in the U.S. However, Stellantis's profits have rapidly dwindled. The stock price has now fallen by nearly 45%, putting the company under severe pressure. A recently announced management change and Tavares' impending departure have done little to reassure investors. The tense situation now requires Tavares to have a clear strategy to contend with increasingly affordable Chinese competitor models and rising production costs. He must also address past mistakes, such as the drastic price increases in the U.S. that met with customer resistance, and the slow response to market changes, which led to overflowing inventories on dealer lots. Experts emphasize that Stellantis's long-term task is to reconsider the need for four brands in the U.S. Dissatisfaction with the current strategy has also been expressed by dealers, who operate formerly profitable but now less appealing Stellantis brands. This underscores the urgency for Tavares to make substantial changes—not least to manage labor relations with the union and avert strikes. At the Paris Auto Show, Tavares will be forced to specifically address these challenges and potentially make difficult decisions to correct Stellantis's misalignment.