Stellantis, the parent company of popular brands such as Jeep and Fiat, is on the hunt for a new CEO as it grapples with declining sales and profits. Carlos Tavares, who has been leading the company since its formation through a merger between the PSA Group and Fiat Chrysler Automobiles, is facing pressure to step down due to the company’s struggles in key markets like North America.
The decision to search for a new CEO comes after months of stagnant sales and concerns raised by dealers about the company’s aging lineup. Stellantis Chairman John Elkann has initiated the search for Tavares’ replacement, whose contract is set to expire in early 2026. While there are no immediate plans for a leadership change, Elkann is reportedly dissatisfied with the company’s performance in North America, particularly in the U.S., its largest profit pool.
The company’s stock has also taken a hit, dropping by more than a third in 2024, reflecting investors’ concerns about Stellantis’ future. The struggles have been attributed to Tavares’ cost-cutting measures, weakening demand for electric models, and increased competition from Chinese automakers. As a result, sales for Stellantis’ American brands like Jeep and Ram have declined in the first half of the year.
With the search for a new CEO underway, there is hope that a change in leadership could help turn around the company’s fortunes and address the challenges it currently faces in the market.
White House Proposes Ban On Chinese Car Parts
In a move to address concerns about national security and personal safety, the White House has proposed a ban on all Chinese vehicle parts being imported into the U.S. The ban would target hardware and software that support driverless systems or connect vehicles to external networks, such as Bluetooth and GPS.
The proposal comes in response to growing fears about potential cybersecurity threats posed by Chinese-made cars. National Security Adviser Jake Sullivan emphasized the need to prevent malicious activities, citing previous instances of malware pre-positioning on critical infrastructure. The ban aims to protect American drivers from potential disruptions and sabotage orchestrated through compromised vehicle systems.
While Chinese-made cars have not been big sellers in the U.S., the ban would impact the supply chain significantly, given the prevalence of Chinese parts in American vehicles. Lawmakers are seeking public input on the proposed ban, with plans to implement it before the 2027 model year.
$1 Billion Fund Launched to Support Electric Suppliers
In a bid to accelerate the transition to electric vehicles, the U.S. government has unveiled a $1 billion initiative to assist smaller auto producers and suppliers in embracing electric technology. The Drive Forward Fund LP, backed by investment firm Monroe Capital, aims to provide low-cost government-guaranteed loans to small and medium-sized auto manufacturers.
The initiative seeks to address the financial constraints faced by smaller suppliers in updating their operations to support electric vehicle production. By offering accessible financing options, the fund aims to facilitate growth and innovation within America’s automotive supply chain. Monroe CEO Ted Koenig expressed optimism about the fund’s potential to drive progress in the industry and support the transition to electric power.
The launch of the Drive Forward Fund follows a previous commitment by Vice President Kamala Harris to allocate over $100 million for small and medium-sized auto parts manufacturers. These initiatives underscore the government’s commitment to fostering innovation and sustainability within the automotive sector.
Toyota Faces Emission Scandal with Forklifts
Toyota, the world’s largest producer of forklifts, is embroiled in an emission scandal involving nine of its forklift truck engines. A class action lawsuit filed in San Francisco federal court alleges that Toyota manipulated emission tests by making software changes or substituting different engines to achieve favorable results in testing.
The lawsuit follows an internal investigation by Toyota that revealed misconduct related to emissions testing procedures. While the company suspended some forklift sales in Japan due to emissions issues, U.S. regulators have not taken enforcement action against Toyota. The plaintiffs in the case, including a San Francisco landscaping company, a New York nursery, and a New Jersey-based food distributor, accuse Toyota of engaging in fraudulent practices that undermine emission certifications.
The emission scandal involving Toyota’s forklifts adds to a series of similar incidents in the automotive industry, raising concerns about compliance and transparency. The case underscores the importance of rigorous emission testing protocols and regulatory oversight to ensure environmental standards are upheld.
