Hertz Global Holdings Inc. CEO Stephen Scherr has been asked to step down following his backfired bet on electric vehicles, mainly Teslas, becoming the significant new vehicles in the company’s fleet. Scherr, who led the car rental company for less than two years, will step down on March 31. The company reported $245 million in losses in the fourth quarter. The Former Cruise COO will be hired as the new CEO at Hertz on April 1.

Stephen Scherr joined Hertz as CEO after the rental giant emerged from bankruptcy. He bet big on electric vehicles. He announced that Hertz would buy 100,000 electric cars from Tesla in October 2021 and many vehicles from Polestar and GM. However, according to sources, these vehicles were much, much fewer.

Reports say Hertz had less than 50,000 Tesla electric vehicles in its fleet in 2022. In December 2023, Hertz announced the sale of its electric cars, most of which were Teslas.

Last year, Tesla slashed its electric vehicle prices across all models to increase sales growth. This had a substantial detrimental effect on the Tesla fleet owned by Hertz. The company lost resale value and had to pay for expensive repairs when the rental company added tens of thousands of new vehicles.

In January, Hertz announced that it would cut its electric fleet due to low demand, costly depreciation, and expensive repairs. It said about 20,000 electric vehicles would be sold, which is estimated to be one-third of its fleet.

The Estero-Florida-based company now looks to Gil West to run Hertz’s affairs. West was the former COO of Cruise, the robotaxi unit of General Motors Inc., and an executive who helped Delta Airlines rebuild its strengths. According to a statement from the rental company late Friday, he will join Hertz as CEO.

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