Hertz CEO steps down following Tesla EV purchase debacle
The company recently sold off a third of its global EV fleet.
Following Hertz's disastrous misadventure with EVs, CEO Stephen Scherr is stepping down, Bloomberg reported. He'll be replaced by the former COO of GM's robotaxi Cruise division, Gil West, who will also join the board of directors.
A year after emerging from bankruptcy in 2020, Hertz said it would transform its car rental business by purchasing 100,000 Tesla EVs. "The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America," the company said at the time. The announcement helped send Tesla's value soaring to a $1 trillion valuation.
Scherr joined Hertz after that decision was made, but increased Hertz's bet on EVs by placing orders with Polestar and GM as well. The company didn't purchase many EVs from those automakers, but by the end, it had around 60,000 from the three automakers.
Things went sideways after that, though. Tesla drastically cut prices of its Model 3 and Model Y EVs, scorching resale values. In addition, Hertz said that Tesla's vehicles were expensive to repair and unpopular with renters.
As a result, the company started unloading 20,000 EVs, about a third of its electrified fleet. That resulted in a $245 million charge for Hertz and its largest quarterly loss since the pandemic. Other rental car firms have also recently ditched EVs, with Germany's Sixt doing away with its entire fleet.
West, meanwhile, was one of nine Cruise executives dismissed following an incident that saw a pedestrian dragged by a Cruise vehicle after being struck by another car. Authorities accused the company of withholding a video that allegedly showed the victim underneath its vehicle.
