Essay by Eric Worrall

Buy Electric, lose your job?

CEO steps down after being hit with expensive EV repairs and low resale prices following purchase of 100,000 Teslas

BY ERIK SCHATZKER, DAVID WELCH, SRIDHAR NATARAJAN AND BLOOMBERG
March 16, 2024 at 10:06 AM GMT+10

Hertz Global Holdings Inc. is replacing its chief executive officer in the wake of a disastrous bet on electric vehicles that the company began unwinding in recent months.

Stephen Scherr, who ran Hertz for just over two years after three decades at Goldman SachsGroup Inc., has decided to step down, the rental-car company said late Friday in a statement. It’s replacing him with Gil West, the former chief operating officer of General Motors Co.’s Cruise robotaxi unit. West also will join the board of directors on April 1, according to the statement, which confirmed an earlier Bloomberg report.

Scherr, 59, joined Hertz several months after it emerged from bankruptcy and started making splashy wagers on electric vehicles. Under new owners Knighthead Capital Management and Certares Management, the rental company announced plans to order 100,000 vehicles from TeslaInc., sending the automaker’s market capitalization soaring past the $1 trillion mark at the time.

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Those bets went awry last year, when Tesla slashed prices across its lineup to keep growing vehicle sales. This hammered the resale value of used Model 3 sedans and Model Y crossovers just after Hertz had added tens of thousands of those vehicles to its fleet.

By December, Hertz started selling off 20,000 electric vehicles, or about a third of its EV fleet. Germany’s Sixt SE — a leading car-renter in Europe — is taking even more drastic measures, phasing Teslas out of its fleet entirely.

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Read more: https://fortune.com/2024/03/15/ceo-steps-down-prices-following-purchase-teslas/

WUWT ran a story in January this year, in which we predicted Hertz’s impairment cost for selling used EVs would likely be a lot worse than the $12,250 loss per vehicle they allowed for. Who in their right mind would want a used EV? Especially a used rental EV, which has suffered who knows what abuse?

Remember, any bump, knock or production fault can potentially turn an EV battery pack into a ticking time bomb, capable of napalming any house structure it is unlucky enough to be parked in, that is if it doesn’t BBQ the occupants of the vehicle while on the road.

I guess we’ll know for sure exactly how much Hertz lost on their disastrous EV gamble, when their final EV fire sale numbers are published.