There is a change of boss at the car rental company Hertz after a failed future commitment to electric vehicles. Gil West, who until recently was responsible for the operational business of the robotaxi company Cruise, will take over the management of the company on April 1. Hertz announced Friday that the previous boss, Stephen Scherr, had resigned.
Hertz sold a third of its electric car fleet
Hertz made a splash in the fall of 2021 with the announcement that it would purchase 100,000 Tesla vehicles. After Scherr rose to the top job two years ago, he went further: An additional 175,000 electric cars were ordered from General Motors and 65,000 from Polestar.
However, earlier this year, Hertz backed down. A third of the world's electric car fleet will be sold and a part of the profits will be invested in the purchase of combustion engines. In the US, it is expected that 20,000 electric vehicles from different manufacturers will be sold throughout the year. Hertz accepted a $245 million writedown for this, but noted that the change would increase operating profit.
Repairs for electric cars are twice as expensive as those for combustion engines
The reasons included, among other things, that they wanted to adapt supply to demand. Another problem was that the resale value of the EV rental fleet had fallen dramatically due to Tesla's multiple price cuts. On the other hand, Hertz noted that repairing damage to electric cars costs approximately twice as much as that of combustion engines. It was also more difficult than expected to reduce the higher costs associated with running electric cars.
The collapse of business and tourist travel during the coronavirus pandemic led Hertz to insolvency proceedings in 2020. In the summer of 2021, financial investors began a new beginning with an investment worth billions. Hertz also sold thousands of vehicles from its fleet at the time, while used car prices soared amid supply shortages.
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