Hertz Global Holdings Inc. (Nasdaq: HTZ) is making a leadership change at the top after unwinding a costly and poorly executed bet on electric vehicles. The rental car giant announced late Friday that CEO Stephen Scherr is stepping down after just over two years in the role.
Scherr, a former Goldman Sachs executive, joined Hertz in early 2022 several months after the company emerged from bankruptcy. Under new owners Knighthead Capital and Certares Management, Hertz embarked on an ambitious strategy to rapidly electrify its fleet. The company announced a high-profile order for 100,000 Teslas, sending the automaker’s market cap soaring over $1 trillion at the time.
However, the electric vehicle gambit quickly turned sour for Hertz. As Tesla slashed prices last year, it hammered the resale values of the used EVs Hertz had been acquiring in bulk. By December, Hertz was selling off around 20,000 electric vehicles, about a third of its EV fleet, citing poor demand, high depreciation, and costly repairs.
Flashback: Hertz Hurt by Tesla’s Price Cut Spree
Hertz took a $245 million charge in the fourth quarter related to the strategic U-turn on EVs, contributing to the company’s largest quarterly loss since the pandemic. The Estero, Florida-based company is now looking to a new leader with direct experience in the challenges of vehicle electrification.
Replacing Scherr is Gil West, the former COO of GM’s Cruise self-driving unit who was dismissed late last year. Before Cruise, West held the COO role at Delta Air Lines.
West will be tasked with righting the ship at Hertz and positioning it for sustained profitability against rivals like Enterprise and Avis. Frequent leadership turnover has plagued Hertz’s strategy and competitiveness for years.
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