Orlando, Florida – Following a tumultuous period involving electric vehicles (EVs), Hertz CEO Stephen Scherr has decided to step down, as reported by Bloomberg. Taking his place will be Gil West, the former COO of GM’s Cruise division, known for its development of robotaxi technology. West will also be appointed to the company’s board of directors as part of the executive shake-up.
Just a year after successfully emerging from bankruptcy in 2020, Hertz had ambitious plans to revolutionize its car rental business by acquiring 100,000 Tesla EVs. This move was intended to position Hertz as a frontrunner in the mobility industry with the largest EV rental fleet in North America, a significant step that also contributed to Tesla’s skyrocketing valuation.
Scherr, who came on board after the decision to purchase Tesla EVs, expanded Hertz’s EV portfolio by placing orders with other automakers such as Polestar and GM. However, the actual number of EVs purchased from these manufacturers was relatively low, with the final count resting at around 60,000 vehicles collectively.
Despite initial optimism surrounding the EV venture, challenges arose. Tesla’s significant price cuts on its Model 3 and Model Y EVs led to plummeting resale values, while concerns about expensive repairs and rental preferences among customers further complicated the situation for Hertz. As a result, the company made the decision to unload 20,000 EVs from its fleet, incurring a substantial $245 million charge and marking its largest quarterly loss since the onset of the pandemic.
In a broader trend within the rental car industry, Hertz’s move to offload EVs mirrors similar actions taken by other companies like Germany’s Sixt, which decided to eliminate its entire electric fleet. This shift signals a reevaluation of the viability of EVs within the rental market, prompting organizations to reassess their strategies and investment decisions in the face of changing consumer preferences.
Meanwhile, Gil West’s appointment to lead Hertz marks a new chapter for the company as it navigates the aftermath of its EV initiative. With his background in the development of autonomous vehicle technology at GM’s Cruise division, West’s leadership may usher in a fresh perspective and strategic direction to guide Hertz through this transitional period. As the company looks towards the future, West’s vision and strategic decision-making could play a pivotal role in reshaping Hertz’s trajectory in the evolving landscape of transportation and mobility services.