Electric dreams become a nightmare for Stellantis dealers

The destructive tenure of Stellantis CEO Carlos Tavares has come to an abrupt but welcome end. Tavares, who had led the auto manufacturer since the 2021 merger that unified brands such as Fiat, Dodge, Jeep, Peugeot, Citroën, and Alfa Romeo, leaves a company grappling with severe challenges. Stellantis faces a sales slump, inventory surpluses, widespread layoffs, labor unrest, a dealer backlash, and a troubled push toward electric vehicles — all symptoms of a deepening crisis.

Just 10 months ago, Stellantis announced a $39 million compensation package for Tavares, making him the highest-paid auto executive in the world. This marked a 56% increase from his previous earnings. When questioned about his pay, Tavares told reporters, “Ninety percent of my salary is determined by the results of the company, so this proves that the company's results are apparently not too bad.”

Tavares failed to serve his company, shareholders, customers, or franchised dealers. Instead, he served two masters: himself and the globalist eco-bureaucracy.

U.S. auto dealers, angered by the company’s struggles, have directly linked its crisis to Tavares’ shoddy leadership. They accuse him of making short-sighted decisions that inflicted long-term damage on the company while ensuring significant financial gains for himself in the short term.

Under Tavares’ leadership, Dodge, Chrysler, and Jeep dealers in the United States have struggled with an overwhelming surplus of unsold inventory. Dealers have criticized the inventory as overpriced compared to competitors, compounded by a stale lineup with new models still years away. The company discontinued popular gasoline-powered vehicles, leaving gaps in the product lineup. Rather than lowering prices or offering incentives to clear dealer lots, Stellantis chose to cut production and lay off employees, worsening the situation.

The company’s third-quarter financial results this year were disastrous, marking a near-unprecedented decline outside of an economic crisis or major disaster. Global vehicle sales dropped 20% compared to the same period in 2023 while U.S. sales fell 36%, plummeting from 470,000 units to fewer than 300,000. Revenue plunged 27% year over year. In response, Stellantis slashed production, delivering 170,000 fewer units to dealers yet failing to resolve the glut of aging inventory still clogging dealer lots.

The EV bubble bursts

Stellantis’ third-quarter sales collapse this year is even more striking when compared to the second quarter. Revenue in Q3 fell to $36 billion, a sharp 23% decline from the $47 billion reported in Q2. Sales effectively collapsed during the summer, signaling a rapid downturn for the automaker.

One key factor behind Stellantis’ limited and outdated product lineup was Tavares’ unwavering commitment to an electric vehicle future. Several high-volume, gasoline-powered models were discontinued to make way for electric replacements that are still years away.

For example, the Chrysler 300 was phased out with plans for an electric successor in 2026, leaving dealers without a comparable product to sell in the interim. Similarly, the Dodge Charger and Challenger were discontinued in 2023 to make room for a future electric Charger, further shrinking the lineup. With the EV transition faltering, dealers now face an uncertain future and a glaring lack of viable products.

Amid this upheaval, Stellantis maintained luxury car pricing, all while working to slash labor costs by shifting production and labor costs to low-wage workers outside of Europe and the United States. There have been near constant announcements of layoffs in the past year, including that of 400 engineers at Stellantis’ U.S. headquarters who were let go and replaced by engineers in Brazil and Mexico at dramatically lower salaries.

As Europe’s electric vehicle bubble burst and consumers increasingly rejected EVs, especially with the decline of government incentives, Stellantis dealers called for relief from the strict EV mandates imposed on the industry. But Tavares refused to intervene.

In fact, Tavares took the opposite approach. While other automakers, including Volkswagen and Renault, urged European regulators to relax emissions mandates meant to drive the EV transition, Tavares redoubled Stellantis’ commitment to the unobtainable goals.

“Electrification is a high-cost transition, and only those with the financial strength and vision to adapt quickly will survive in this environment,” he said, signaling his belief that the company could outlast its competitors.

With Carlos Tavares unwilling to fight for Stellantis as the EV bubble burst, its European dealers were forced to take matters into their own hands. They appealed directly to the European Commission for relief from the impending 2025 emissions restrictions.

Dealers revolt, shareholders suffer

Meanwhile, in the United States, Stellantis’ National Dealer Council released a scathing open letter to Tavares just weeks earlier. The letter aimed to “sound an alarm” to investors, employees, and Stellantis board members about the CEO’s “reckless short-term decision making.” The council accused Tavares of causing the “rapid degradation” of the Dodge, Ram, Chrysler, and Jeep brands and overseeing a significant collapse in market share.

For over two years now, the U.S. Stellantis National Dealer Council has been sounding this alarm to your U.S. executive team, warning them that the course you had set for Stellantis in the U.S. was going to be a disaster in the long run. A disaster not just for us, but for everyone involved — and now, that disaster has arrived. In 2023, you engineered a record year of profitability for Stellantis, earning you the title of the highest-compensated automotive CEO. You personally earned a record amount of almost forty million dollars that year. Unfortunately, the engineering and structuring of that year have led us to exactly where we told your executives we would be today.

The bill has come due for the decisions that you made to engineer those profits in 2023, and your attempt at a soft landing on the backs of your employees, your dealers, and your suppliers is frankly just wrong. We did not create this problem, the federal government did not create this problem, the UAW did not create this problem, and your employees did not create this problem — you created this problem.

With Tavares’ departure, Stellantis has an opportunity to begin a rescue effort, though at this stage, it may be more of a salvage operation.

Glenn Beck recently wrote about the growing wave of anti-institutional anger, warning for years that it could erupt into chaos. Tavares’ extraordinary self-awarded compensation, approved by the board despite actions that weakened a global industrial giant, will only fuel that rage.

Tavares failed to serve his company, shareholders, customers, or franchised dealers. Instead, he served two masters: himself and the globalist eco-bureaucracy that seems content to watch Stellantis collapse as a manufacturer of gasoline-powered vehicles.

To maintain both civil and economic order, investors and corporate boards must take responsibility for preventing further destruction of institutions like Stellantis. Greedy and self-serving leaders, such as Carlos Tavares, cannot be allowed to undermine companies at the expense of all other stakeholders.