Stephen Scherr, the outgoing CEO of Hertz Global Holdings Inc., has decided to step down from his position on March 31 following the company’s largest quarterly loss since 2020.
This significant loss is attributed to Hertz’s risky bet on electric vehicles (EVs), which turned out to be more expensive to maintain than initially anticipated. Gil West, a seasoned executive with experience at Delta Airlines and General Motors’ Cruise unit, will take over as the new CEO on April 1.
Scherr, who joined Hertz two years ago as the company emerged from bankruptcy, had placed a significant focus on EVs during his tenure.
However, the company soon realized that EVs were more of an “operational distraction,” as Scherr told investors. The CEO blamed EVs for Hertz’s $348 million loss in profits.
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In a move that contradicts the Biden administration’s previous praise for Hertz’s investment in EVs, the company announced plans to offload 20,000 electric vehicles from its U.S. fleet throughout 2024 and switch back to gas cars.
Hertz CEO Stephen Scherr resigns after EV push goes busthttps://t.co/Fpfdmeob2j
— FOX Business (@FoxBusiness) March 17, 2024
This decision comes amid the president’s efforts to promote widespread adoption of EVs as part of his climate agenda.
The shift in Hertz’s strategy is not entirely surprising, given the challenges faced by the EV market.
A recent Consumer Reports survey, as reported by the Associated Press, found that EVs from the 2021 to 2023 model years are significantly less reliable than gasoline-powered vehicles, with battery and charging systems, as well as fit issues with body panels and interiors, being the main culprits.
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Car dealers and manufacturers are also grappling with the difficulty of selling EVs, despite offering deep discounts and promotional tactics.
The market appears to have reached a point of saturation with early adopters, a small but enthusiastic group willing to embrace new technologies at any cost.
The general population, however, remains hesitant due to steep prices, increasing interest rates, and inflation, resulting in a surplus of unsold EVs on lots and longer sales times compared to gas-powered and hybrid vehicles.
