ESTERO, FL – Hertz turned heads back in 2021 when the automobile renter announced that they would be purchasing a whopping 100,000 Tesla’s to add to their fleet in an effort to embrace electric vehicle (EV) technology that CEO Stephen Scherr was betting would represent the future of his company. This development came just six months after Hertz narrowly avoided having to declare bankruptcy thanks to a $4.2 billion restructuring.
At the time, it was heralded as a bold and progressive move for Hertz, with the company’s stock jumping an impressive 40 percent over the course of two weeks after the announcement.
But fast-forward to March 2024, and it turns out that the Tesla gamble did not pay off at all – thanks to lack of EV demand amongst renters, as well as expensive repair costs and low resale value – with Scherr resigning as CEO effective immediately over the matter and former Cruise executive Gil West stepping in to replace him.
Unfortunately for Scherr, demand for gas-powered rental cars for the last few years has far outstripped that of their electrically powered brethren.
In addition, Hertz had purchased their new Tesla fleet at a time where their prices were near an all-time high; however, the Elon Musk-owned automaker has engaged in a series of price-cutting measures over the course of the past year in order to remain at the forefront of an increasingly competitive EV market, and as a result Hertz is discovering that the resale value of their Teslas – once they’ve reached the end of their effective rental life cycle – are now perilously low.
Those issues, coupled with the much higher repair costs associated with EVs when compared to internal combustion engine-based vehicles, have resulted in Hertz announcing plans to sell at least 20,000 of their Teslas, with more sales possibly to come in the near future.
Scherr’s failed gamble has left West in a bit of a pickle as he steps into the role of new CEO- how to dig the company out of the financial hole that it currently finds itself in, and how to balance current consumer demand for gas-powered cars versus preparing for a future where alternative fuel vehicles will become more and more prominent.
Christopher Boyle is an investigative journalist, videographer, reporter and writer for SEARCHEN NETWORKS® as well as other independent news and media organizations in the United States. Christopher works on a wide variety of topics and fields, has been featured in print and online in a variety of publications, from local to national, and helps keep a keen-eye on what’s happening in the automotive world for Auto Buyers Market.