Hertz CEO steps down after failed Tesla EV purchase

In the wake of Hertz’s disastrous electric car mishap, CEO Stephen Sher is stepping down. Bloomberg reported. He will be replaced by former COO of GM’s Cruise Taxi division, Gil West, who will also join the board of directors.

A year after emerging from bankruptcy in 2020, Hertz said it would transform its rental car business by purchasing 100,000 Tesla EVs. “The new Hertz will lead the way as a mobility company, starting with the largest EV rental fleet in North America,” the company said at the time. The announcement helped send Tesla’s value to $1 trillion.

Scher joined Hertz after that decision, but increased Hertz’s bet on electric cars by placing orders with Polestar and GM as well. The company didn’t buy many EVs from those automakers, but it ended up with about 60,000 from the three automakers.

But then things went sideways. Tesla has drastically reduced the prices of its Model 3 and Model Y EVs, burning resale values. Hertz also said Tesla vehicles are expensive to repair and unpopular with renters.

As a result, the company began offloading 20,000 electric cars, about a third of its electrified fleet. That led to a $245 million charge for Hertz and its biggest quarterly loss since the pandemic. Other car rental companies have also recently moved away from electric cars, with Germany’s Sixt ditching its entire fleet.

West, meanwhile, was one of nine Cruise executives fired after an incident in which a pedestrian was dragged from a Cruise vehicle after being hit by another car. Authorities accused the company to hide a video allegedly showing the victim under her vehicle.