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Almost all of us have made a boneheaded purchase or three in our lives. But few are notable as the debacle at Hertz, a company which most gearheads know decided to buy tens of thousands of electric vehicles only to bin them at severely subvented prices. Now, the CEO is stepping down from his role.
Readers will recall Hertz made the decision in 2021 to go all-in on electric vehicles, committing to buying a hundred thousand Tesla cars which would clearly expand its fleet of EVs by leaps and bounds. Just over two years later, the company cited low demand and high repair costs as some reasons for divesting large swaths of its EV fleet. This flood of product on the used car market surely didn’t help valuations of the things, though nor did Tesla itself during a round of its own price cuts.
Thoughts on why the EV experiment at Hertz didn’t work are all over the map, with extreme reactions from both ends of EV fandom being as annoying as they are predictable. The truth, as always, likely lies somewhere in the middle. Our own Matt Posky rightly points out it’s a function of how rental cars are generally used, where it is not unusual for renters to pile on 700 miles in a day. This can be difficult in an EV.
Also not helping matters is that Hertz seems to have invested in the cars but not any supporting infrastructure. If, as most reports indicate, the company took equal approach to an EV’s returning state of charge as it does with an ICE car’s fuel level, that means renters would have been required to loiter at a Level 3 charger prior to returning the thing. Raise your hand if you’ve ever skidded sideways into the last gas station before hitting the rental place, having forgotten to fuel up with only a short amount of time before yer flight leaves? Exactly. If Hertz had baked something into their plans which plunked numerous Level 3 DC chargers at each location, along with provisions in the rental agreement for bringing the thing back with few electrons in the battery, things might have turned out differently.
But they didn’t, so it hasn’t. And, as a result, CEO Stephen Scherr is out on his ear. Don’t feel too badly – it is reported in 2022 he raked in $182.1 million including $178 million in stock awards and a salary of $1.27 million. A filing by Hertz is said to have stated “Mr. Scherr’s wages for 2022, calculated for purposes of his Form W-2 issued by the company, were $27,181,395.”
[Image: Hertz via video screenshot]
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