Tavares Resigns Amid Luton Plant Closure & ZEV Challenges
Carlos Tavares, the CEO of Stellantis, stepped down unexpectedly over the weekend, just days after announcing the closure of Vauxhall's historic Luton plant. The decision will impact 1,100 UK jobs, with employees offered relocation opportunities to Stellantis's Ellesmere Port electric commercial vehicle plant in the North West.
The company cited the UK's stringent Zero-Emissions Vehicle (ZEV) mandate as a critical factor in the plant's closure. The mandate requires 22% of all vehicle sales in 2024 to be zero-emissions, with hefty fines for non-compliance.
Carlos had long criticised the policy, describing it as "terrible" and warning that it could "kill" the domestic car industry.
Profit warnings and strategy clashes
Carlos' resignation comes amidst financial struggles for Stellantis, which recently issued a profit warning for 2024, forecasting a cash burn of up to US$10.8bn. A slump in North American sales, weakening demand for EVs and rising competition from Chinese brands were highlighted as critical challenges.
Stellantis downgraded its profit margin forecast in September from double digits to 5.5%—7.0%, signalling significant headwinds. Carlos's financial strain and differing strategic views with the board are believed to have accelerated his departure.
Henri de Castries, Senior Independent Director at Stellantis commented:
"In recent weeks, different views have emerged, which have resulted in the board and the CEO coming to today's decision."
Impact of the ZEV mandate on Stellantis' UK operations
The ZEV mandate has been a focal point of Stellantis' challenges in the UK. Carlos warned earlier this year that the policy might force the company to scale back its operations in the UK or halt sales of specific models altogether.
During the Paris Motor Show in October, he hinted at a necessary "correction" to the company's UK business to mitigate profitability concerns.
The closure of the Luton plant, which has a legacy spanning 120 years, highlights the tangible impact of these policy pressures.
Interim leadership and future plans
With Carloss' resignation effective immediately, Stellantis's board, led by Chairman John Elkann, has established an interim executive committee to oversee operations. A special committee is actively searching for a permanent CEO, with an appointment expected in the first half of 2025.
"Carlos played a pivotal role in creating Stellantis and the successful turnarounds of PSA and Opel. We are grateful for his leadership.
Stellantis's path forward
Despite the leadership shake-up, Stellantis remains committed to its strategic goals. The company affirmed its financial guidance 2024, even as it grapples with a rapidly evolving automotive landscape.
The resignation of a high-profile leader like Carlos, contentious plant closures and regulatory pressures signal a turbulent period for Stellantis. However, the automaker's focus on electric vehicle innovation and navigating the challenges of the ZEV mandate will likely define its next chapter.
As the global auto industry shifts towards sustainability, stakeholders and competitors will closely watch Stellantis's actions in the coming months.
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