The head of Stellantis, who recently made the decision to shut down the Luton van factory, has stepped down from his position effective immediately.

Carlos Tavares, the 66-year-old chief executive, faced increasing challenges amidst the declining performance of the €36 billion global automotive entity, which encompasses brands such as Vauxhall in the UK, Peugeot, Citroen, Fiat, Chrysler, and Jeep.

Last night, Stellantis announced that Tavares’s resignation was accepted following what seems to be a significant dispute with chairman John Elkann, a member of the wealthy Agnelli family, who are the primary stakeholders in Stellantis.

The company stated it had “accepted the resignation… with immediate effect” from Tavares.

Henri de Castries, former CEO of Axa and the senior independent director at Stellantis, commented: “The success of Stellantis since its formation has relied on a strong alignment among the shareholders, the board, and the CEO. However, divergent views have emerged in recent weeks, leading to the board’s decision alongside the CEO’s departure.”

Stellantis has been experiencing significant upheaval, reporting a staggering 20 percent drop in sales volume for the third quarter and a €12 billion decrease in revenue. In response, Tavares had begun restructuring efforts, leading to high-level changes in the organization.

He has openly criticized governmental regulations for aggressive electric vehicle sales targets, arguing that the expectations are unrealistic and could lead to financial losses for Stellantis. Despite these challenges, the company is concurrently initiating a €3 billion share buyback program for its shareholders.

Tavares’s contentious relationship with the UK government regarding zero-emission vehicle policies influenced his decision to close the Vauxhall Vivaro plant in Luton, which jeopardizes around 1,000 jobs. The company aims to focus on its electric van production site in Ellesmere Port, which Tavares only kept operational during the pandemic after negotiating substantial financial support from the government.

Following the announcement, Stellantis shares plummeted over 8 percent, settling at €11.46, representing a 43 percent decline over the past year.

Analysts from Jefferies noted, “While Tavares’s early departure isn’t entirely surprising, it leaves Stellantis without a leader during a critical period that includes vital decisions on brand strategy and managing excess production capacity in both Europe and North America.”

Elkann will spearhead an interim committee to guide Stellantis until a new CEO is appointed. Analysts anticipate that the search for Tavares’s successor will likely extend beyond the automotive sector.