Business performance is propelled by great leadership. The most important leader in any company is the CEO. The automotive industry is no exception to this CEO performance rule. Lee Iacocca, Alan Mulally, Sergio Marchionne, Akio Toyoda, and even Elon Musk all drove significant performance at each of their respective automotive companies.
In January 2021, French automotive manufacturer Groupe PSA merged with Fiat Chrysler Automobiles (FCA) to form the auto company now called Stellantis. One of the architects of the merger with FCA was Group PSA’s CEO, Carlos Tavares. Today, as CEO of Stellantis, Tavares is quickly becoming one of those car industry CEOs synonymous with the success of the company they lead.
While the automotive press either focuses on the pure-play EV companies like Tesla and Rivian, or a narrow list of legacy auto companies like GM and Toyota, investors have taken notice of the performance of Stellantis under Tavares. The company delivered record-breaking full-year financial performance in 2023. Its share price is up nearly 85% since the January 2021 merger.
The company’s Dare Forward 2030 strategic plan outlines ambitious goals that investors appreciate, but the automotive press seems to ignore. Under Tavares, the company aims to be the industry leader by achieving carbon neutrality by 2038. Tavares’ vision includes transitioning to 100% BEV sales in Europe, and a more reasonable 50% in the U.S. by 2030. The company is planning to double net revenue by 2030, while sustaining their double-digit operating margins. Envisioning the future of Stellantis as a mobility tech company, Tavares has even strengthened the company’s shareholding in Archer Aviation, a developer of air mobility networks.
Industry experts once believed Tavares and Stellantis were late in investing toward a rapid transition to an all-EV fleet, similar to their past opinion of Toyota. Today, it seems like a more deliberate EV transition is the better legacy automaker business strategy that Tavares seemed to understand very early. Tavares is focused on the importance of both innovation and profitability, highlighting the need for legacy auto companies like Stellantis to be transformative, tech-minded, and financially successful.
Disclosure: I own Stellantis shares.
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