Hertz changes CEO after failed electric offensive and backpedals
There is a change in leadership at the car rental company Hertz following a failed bet on the future of electric vehicles. Starting April 1, Gil West, who recently oversaw operations at the robotaxi company Cruise, will take over the management of the company. The current CEO, Stephen Scherr, has resigned, as Hertz announced on Friday. Hertz made headlines in the fall of 2021 with the announcement that it would purchase 100,000 Tesla vehicles. After Scherr took over the CEO position just over two years ago, he expanded on this: an additional 175,000 electric cars from General Motors and 65,000 from Polestar were to be ordered.
However, at the beginning of this year, Hertz reversed course. A third of the global electric vehicle fleet is being sold, with part of the proceeds being invested in the purchase of combustion engine vehicles. In the US, 20,000 electric cars from various manufacturers are to be sold off over the course of the year. Hertz accepted a write-down of $245 million for this, but noted that the operating profit would increase as a result of the transition.
Among the reasons given, it was said that they wanted to adjust the offer to the demand. Another problem was that multiple price cuts by Tesla had significantly decreased the resale value of the electric rental fleet. Furthermore, Hertz pointed out that damage repairs for electric cars are about twice as expensive as for internal combustion vehicles. It was also more challenging than expected to reduce the higher costs associated with operating electric cars.
The collapse of business and tourist travel during the coronavirus pandemic drove Hertz into bankruptcy proceedings in 2020. In the summer of 2021, financial investors initiated a new start with a multi-billion dollar investment. Hertz also sold thousands of vehicles from its fleet at that time, while used car prices soared due to supply bottlenecks.
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