CEO Stephen Scherr of Hertz is stepping down in the wake of the company’s catastrophic electric vehicle mishap, according to Bloomberg. Gil West, a former COO of GM’s robotaxi Cruise division, will take his place and become a member of the board of directors.
2020 saw Hertz come out of bankruptcy and announce that it was going to buy 100,000 Tesla electric vehicles to revamp its car rental business. “The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America,” the business stated at the time. Tesla’s worth surged to a $1 trillion valuation with the announcement.
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.
