Hertz Chief Executive resigns after Tesla EV purchase mishap

Reported by Bloomberg, CEO Stephen Scherr is stepping down following Hertz’s EV debacle. Gil West, the former COO of GM’s robotaxi Cruise division, will take his place and join the board of directors.

In 2020, a year after emerging from bankruptcy, Hertz announced plans to purchase 100,000 Tesla EVs, aiming to lead as a mobility company in North America. This move propelled Tesla’s value to a $1 trillion valuation.

Scherr, who joined after the decision, expanded Hertz’s EV commitment by ordering from Polestar and GM. Although not many were purchased, the company ended up with around 60,000 EVs from the three automakers.

However, Tesla’s price cuts on its Model 3 and Model Y EVs severely affected resale values, leading to challenges for Hertz. Moreover, the company cited expensive repairs and low popularity among renters for Tesla vehicles.

Consequently, Hertz decided to offload 20,000 EVs, resulting in a $245 million charge and its largest quarterly loss since the pandemic. Other rental firms, like Germany’s Sixt, have also phased out their EV fleets.

In parallel, Gil West, previously part of Cruise, faced dismissal along with eight other executives following a pedestrian incident involving a Cruise vehicle. Authorities accused the company of withholding crucial video evidence related to the accident.

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