The global CEO of Hertz has resigned amidst significant losses for the rental giant, following setbacks in its ambitious plan to expand its electric vehicle (EV) fleet.
Stephen Scherr, who took the helm in February 2022, will depart from his role and the company’s board on April 1, with Gil West, formerly of General Motors’ Cruise, set to assume leadership.
Hertz had aimed to bolster its US fleet with 25% EVs by 2025, initiating the plan with an order of 100,000 Tesla EVs in 2021. However, issues with rising repair costs and diminished demand for EVs impacted the company’s finances.
Despite a subsequent deal with Polestar for 65,000 EVs, Hertz faced challenges, including the sale of 20,000 EVs from its US fleet due to depreciation and repair costs.
Additionally, a request to Polestar to revise its contract was accepted under conditions to protect the EV market. The failed ventures, compounded by delays in receiving Tesla orders, revealed Hertz’s vulnerability to market fluctuations, contributing to a significant drop in share prices over the past year.
Hertz’s decision to purchase vehicles outright, rather than retaining the option to sell them back to manufacturers, further exposed the company to market volatility.
This approach, coupled with challenges in fulfilling the Tesla order and subsequent renegotiations with Polestar, led to a decline in shareholder confidence, with Hertz’s NASDAQ share prices plummeting from US$19.36 to US$7.49 over the past year.