Tavares, 66, played a pivotal role in the 2021 merger of Fiat Chrysler Automobiles and France's Peugeot SA to create Stellantis, one of the largest automakers worldwide.

Interim Leadership and Succession Plans Stellantis board chair John Elkann will lead a new executive committee until a permanent replacement is named. The board confirmed that the search for a successor is "well underway."

Tavares had previously announced plans to retire at the end of his contract in 2026. His abrupt exit comes as Stellantis faces mounting challenges in transitioning to electric vehicles (EVs) and reviving its struggling North American market.

Declining U.S. Performance Stellantis’ U.S. sales dropped 17% in the first nine months of 2024. Dealers criticized Tavares for prioritizing short-term profits in 2023, which they argued left the company ill-prepared for market competition. Stellantis issued a profit warning in response, forecasting a steep drop in operating profit margins.

The company's stock has plunged over 50% this year, closing at $13.20 on Friday, down from a high of $29 in March.

Legacy and Future Challenges Under Tavares, Stellantis achieved record profits of €18.6 billion ($19.7 billion) in 2023, but slower EV development compared to rivals like GM and Ford left the company vulnerable.

The board’s statement emphasized that Stellantis' success had relied on alignment between stakeholders but noted that “different views” had recently emerged, prompting the leadership change.

As the company navigates its transition to EVs and resolves U.S. market challenges, the automaker faces a critical juncture in defining its future.