Failed electric car venture claims Hertz CEO
The global head of Hertz has steppeddown amid huge losses for the rental car giant, which has recently hit thebrakes on its plans to expand its electric vehicle (EV) offerings amid risingcosts.
Stephen Scherr announced he would vacate his role as Tesla CEO and leavethe rental car company’s board on April 1, with Gil West – former chiefoperating officer of General Motors’ autonomous taxi firm Cruise – set to takeover.
Mr Scherr took the role as Hertz CEO in February 2022, almost two yearsafter the company filed for bankruptcy in the US and Canada in the first monthsof the global pandemic.
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Failed electric carventure claims Hertz CEO© Provided by CarExpert.com.au
The executive soon sought to deliver on the rental car firm’s plans tobolster its US fleet with at least 25 per cent EVs by 2025, which had been setin motion in late 2021 when Hertz made an order for 100,000 Tesla EVs in theUS.
This order was made at the list price of the cars, not at a discountedrate, as is common between rental companies and carmakers.
Under Mr Scherr’s leadership, Hertz signed a deal reportedly worth US$3billion (A$4.62bn) with Chinese-owned carmaker Polestar for 65,000 of its EVsby 2027 for the firm’s US fleet.
However, rising repair costs for EVs compared to traditional petrol anddiesel cars soon began to impact the company, while flagging demand forbattery-powered vehicles in the wider market affected resale values.
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Hertz announced it would sell20,000 EVs from its US fleet due to rising depreciation andrepair costs in January 2024, and later asked Polestarto waive its EV supply contract last month – a request whichthe carmaker agreed to on the condition that the rental car company wouldn’toffload its EVs at a significantly lower price or too soon.
SHAPE \* MERGEFORMAT Related video: Hertz CEO toStep Down as Electric Vehicle Bet Unwinds (Bloomberg)
Hertz shares are getting a modest bid here in after
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The nixing of the Polestar deal followed reports late last year thatHertz had received just 35,000 of the 100,000 Teslas it had initially orderedtwo years prior.
Previous reports have pointed to Hertz being vulnerable to marketconditions as it purchases the cars on its fleet outright, rather than the moretraditional practice of having an option to sell its vehicles back tomanufacturers for a set price.
Over the past year, Hertz share prices have dropped from US$19.36 toUS$7.49 on the NASDAQ.
Failedelectric car venture claims Hertz CEO (msn.com)
