The chief executive officer of rental car company Hertz Global Holdings Inc. is resigning after a bet on electric vehicles crumbled.
The announcement came Friday after Stephen Scherr ran the company for over two years, according to Fortune magazine.
The report noted that when Scherr took the helm, the company had just experienced bankruptcy.
Hertz then announced plans to order 100,000 cars from Tesla, the Fortune article continued:
Hertz doubled down on EVs in the months after Scherr took over, placing big orders with Polestar, the electric-car maker owned by China’s Geely and Sweden’s Volvo Car, and GM. The company ended up buying a small number of cars from the two companies, a spokesperson said.
Those bets went awry last year, when Tesla slashed prices across its lineup to keep growing vehicle sales. This hammered the resale value of used Model 3 sedans and Model Y crossovers just after Hertz had added tens of thousands of those vehicles to its fleet.
The company began selling approximately 20,000 of its electric vehicles toward the close of 2023, the magazine continued.
“Hertz announced its EV sell-down plans in January, citing lackluster demand, costly depreciation and expensive repairs.
The Estero, Florida-based company took a $245 million charge and reported its biggest quarterly loss since the pandemic,” it said.
In October, Hertz’s profitability wavered and the company began blaming the decision to “go green” with Elon Musk’s electric vehicles, Breitbart News reported.
“The company is blaming its recent quarterly profits miss on Tesla’s price cuts and unexpectedly high EV repair costs, which both caused big problems due to Hertz’s decision to build a large fleet of Tesla vehicles,” the outlet said.
File/Stephen Scherr speaks at the World Economic Forum on Latin America 2012 in Puerto Vallarta, Mexico, on Tuesday, April 17, 2012. (Jon Halty/Bloomberg via Getty Images)
In January, Breitbart News reported Hertz was selling off tens of thousands of electric cars due to a lack of demand, and the company was going to replace them with gas-powered cars.
“The news comes as American auto dealers have warned that consumers are far less likely to buy EVs over traditional gas-powered cars despite all efforts from the Biden administration to get Americans into EVs,” the outlet said.
Now, Hertz will replace Scherr with Gil West who previously worked as the chief operating officer for General Motors’ Co.’s Cruise robotaxi section, the Fortune report said.
“Scherr’s successor, West, was one of nine Cruise executives that GM dismissed at the end of last year after California regulators accused the company of withholding information about one of its self-driving vehicles striking and dragging a pedestrian,” the article stated.
Meanwhile, Tesla has been facing doubts about its ability to sustain growth and keep up its lead in the electric vehicle market, Breitbart News reported Saturday.