There is a change in boss at the car rental company Hertz after a failed future bet on electric vehicles. Gil West, who until recently was responsible for operational business at the robotaxi company Cruise, is set to take over the management of the company on April 1st. Hertz announced on Friday that the previous boss, Stephen Scherr, had resigned.
Hertz caused a stir in fall 2021 with the announcement that it would buy 100,000 Tesla vehicles. After Scherr came to the top job a good two years ago, he went further: an additional 175,000 electric cars were to be ordered from General Motors and 65,000 from Polestar.
However, earlier this year Hertz went into reverse gear. A third of the global electric car fleet will be sold – and some of the proceeds will be invested in the purchase of combustion engines. In the USA, 20,000 electric vehicles from various manufacturers are expected to be sold over the course of the year. Hertz took a write-off of $245 million for this, but pointed out that the switch would increase its operating profit.
The reasons included, among other things, that they wanted to adapt the supply to the demand. Another problem was that the resale value of the electric rental fleet had fallen sharply due to Tesla’s multiple price cuts. On the other hand, Hertz pointed out that damage repairs for electric cars are about twice as expensive as for combustion engines. It was also more difficult than expected to reduce the higher costs associated with operating electric cars.
The collapse in business and tourist travel during the corona pandemic drove Hertz into insolvency proceedings in 2020. In the summer of 2021, financial investors started a new beginning with an investment worth billions. Hertz also sold thousands of vehicles from its fleet at the time, while used car prices skyrocketed amid supply shortages.