Hertz, a rental car company facing ongoing challenges, recently made headlines with the announcement of significant changes. In January, it unveiled plans to sell off 20,000 electric vehicles (EVs), constituting about a third of its EV fleet, alongside the departure of its CEO, marking the company's fifth leadership change in four years.
Stephen Scherr, who joined Hertz from Goldman Sachs two years ago, is stepping down this month, to be succeeded by Gil West, former COO of Delta Air Lines and General Motors’ Cruise unit, as part of the company's leadership reshuffle.
Hertz faced financial setbacks, including a $245 million earnings hit due to the devaluation of its EVs in the last quarter. Despite a 40% surge in American EV purchases last year, Hertz struggled to meet expectations amid a competitive market landscape. Tesla's pricing strategy initiated a price war, affecting both new and used EV values, impacting Hertz's profitability.
The company's challenges extended beyond EVs, with industry analysts citing poor execution and marketing strategies. Despite consumer interest in EVs, the rental experience posed challenges due to limited charging infrastructure and time constraints for travelers.
While Hertz initially aimed to capitalize on the burgeoning EV demand by purchasing from Tesla, General Motors, and Polestar, logistical issues hindered fleet expansion. Additionally, Hertz faced elevated repair costs for EVs compared to traditional vehicles.
Apart from EV-related issues, Hertz faced legal troubles, including a $168 million settlement for falsely reporting rental cars as stolen, tarnishing its reputation further. Leadership transitions and previous bankruptcy filings added to the company's woes, contrasting with competitors like Avis Budget Group, which reported robust financial performance.
Despite its historical prominence in the rental car industry, Hertz's revenue lagged behind rivals, reflecting the company's struggle to adapt to evolving market dynamics and operational challenges.
