Hertz, a major player in the global car rental industry, is undergoing a leadership change as it shifts course on its electric vehicle (EV) strategy due to mounting expenses.
The company announced on Friday that Stephen Scherr, its CEO and a longstanding member of the board of directors, will step down effective March 31. Scherr, who brought extensive experience from his nearly three-decade tenure at Goldman Sachs, led Hertz for just over two years.
In January, Hertz announced in financial filings that it had made the "strategic decision" to sell approximately 20,000 EVs from its U.S. fleet, or about one-third of its global EV fleet, and to instead invest in gas-powered cars.https://t.co/jvrmur4D0j
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This decision comes amid challenges faced by Hertz, including increased repair costs and sluggish demand for EV rentals.
In January, Hertz disclosed its strategic move to sell approximately 20,000 EVs from its U.S. fleet, constituting about one-third of its global EV fleet.
Instead, the company opted to pivot towards investing in gasoline-powered vehicles. This reversal marks a significant departure from its earlier stance, which had been praised by the Biden administration for aligning with efforts to promote electric transportation as part of broader climate initiatives.
The consequences of this strategic shift were felt last month when Hertz reported its largest quarterly loss since 2020.
Scherr's tenure at Hertz was characterized by a bold bet on EVs as the company emerged from bankruptcy proceedings. The subsequent challenges in the EV market prompted the company to reevaluate its approach.
To replace Scherr, Hertz has tapped Gil West, a seasoned executive with experience at Delta Airlines and General Motors' Cruise unit. West, who previously served as Chief Operating Officer of Delta Airlines, brings a wealth of expertise in operational management to his new role.
His appointment is effective April 1, and Scherr is collaborating closely with him in the weeks leading up to the transition to ensure a smooth handover.
Hertz's decision to change its leadership and strategic direction reflects the complex dynamics at play in the automotive industry, particularly regarding the transition to electric vehicles.
While EVs hold promise for reducing carbon emissions and advancing sustainability goals, challenges such as high costs and evolving market demand present hurdles for companies like Hertz.
As Hertz navigates this transition under new leadership, the industry will be watching closely to see how the company adapts its business model to meet the changing landscape of the automotive market.
The outcome of these efforts will not only impact Hertz's future but also contribute to broader discussions surrounding the role of EVs in the transportation sector and efforts to combat climate change.
