The Hertz CEO steps down following Tesla EV purchase debacle: Stephen M. Scherr voluntarily left Hertz on March 31, 2024, and Wayne “Gil” West became CEO on April 1. Hertz did not say Scherr was fired, but the change came as Hertz reversed its Tesla-led EV expansion after falling resale values, repair costs, depreciation, and weak fleet economics.
Hertz’s Tesla bet became one of the clearest examples of the difference between buying electric vehicles and operating them profitably at rental-fleet scale. The company had announced a plan for 100,000 Teslas, then recognized major EV-related costs and planned a 30,000-vehicle reduction.
Key takeaways
- Stephen Scherr voluntarily left Hertz on March 31, 2024, and Wayne “Gil” West became CEO on April 1, 2024.
- Hertz’s original EV strategy centered on buying 100,000 Tesla vehicles by the end of 2022, primarily Model 3 sedans.
- Tesla’s new-vehicle price cuts reduced the resale value of comparable used Teslas, creating losses when Hertz sold or reclassified its fleet.
- Hertz recorded a $245 million EV-related write-down in its 2023 Form 10-K and reported $195 million of EV-related depreciation in the first quarter of 2024.
- Hertz expanded its planned EV reduction to 30,000 vehicles in 2024 and said the reduction was completed during 2024.
- Hertz’s SEC filing does not say Scherr was fired over the Tesla strategy; the filing describes his resignation as voluntary and not caused by disagreement with Hertz.
Why did the Hertz CEO resign after the Tesla EV purchase debacle?
The Hertz CEO steps down following Tesla EV purchase debacle because Stephen M. Scherr left the company during a major reversal of Hertz’s electric-vehicle strategy, although Hertz did not formally attribute his departure to the Tesla decision. Scherr’s resignation took effect March 31, 2024, and former Cruise and Delta executive Wayne “Gil” West became Hertz CEO on April 1, 2024.
Hertz’s March 2024 announcement described the leadership change as a planned transition. The company’s SEC Form 8-K says Scherr notified Hertz of his decision to resign and specifically states that the resignation was not because of disagreement with Hertz over the company’s operations, policies, or practices.
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The timing nevertheless mattered. Hertz had begun unwinding its highly publicized Tesla-led EV expansion after lower resale values, collision and damage expenses, depreciation, and weaker-than-expected rental economics made the fleet less profitable than planned. The most accurate description is therefore that Scherr voluntarily stepped down while Hertz was correcting a costly EV-fleet strategy—not that Hertz publicly fired him over the strategy.
What happened to Hertz’s 100,000-Tesla plan?
Hertz announced on October 25, 2021, that it planned to purchase 100,000 Tesla vehicles by the end of 2022. The plan, reported at the time by Axios in 2021, made Tesla Model 3 sedans a prominent part of Hertz’s proposed electric rental fleet.
The announcement was unusually ambitious because Hertz was not buying the vehicles simply to demonstrate electric mobility. Hertz needed the cars to function as revenue-producing fleet assets. Each vehicle had to generate acceptable rental revenue while retaining enough value to limit losses when Hertz eventually sold it.
By December 2023, Hertz had decided to significantly reduce its global EV fleet and began classifying vehicles for sale. Hertz then expanded the planned reduction from 20,000 vehicles to 30,000 vehicles during the first quarter of 2024. On February 13, 2025, Hertz reported that the 30,000-vehicle reduction announced in 2023 had been completed during 2024.
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| Date | Event | Why it mattered |
|---|---|---|
| October 25, 2021 | Hertz announces plans to buy 100,000 Tesla vehicles by the end of 2022. | The company makes Tesla the centerpiece of a large EV-fleet expansion. |
| February 28, 2022 | Stephen Scherr begins serving as Hertz CEO. | Scherr leads Hertz during the expansion and subsequent EV reversal. |
| December 2023 | Hertz decides to significantly reduce its global EV fleet and classifies vehicles for sale. | The company begins recognizing the financial consequences of selling or holding the vehicles for sale. |
| March 15, 2024 | Hertz announces that Scherr will step down and Gil West will become CEO. | The leadership transition is announced as the EV strategy is being unwound. |
| March 31–April 1, 2024 | Scherr leaves; West becomes CEO. | West takes over with an operating and profitability-focused mandate. |
| February 13, 2025 | Hertz reports that the 30,000-vehicle reduction was completed during 2024. | The planned sell-down moves from an announced target to a completed program. |
Did Tesla’s price cuts cause Hertz’s EV losses?
Tesla’s price cuts were a major cause of Hertz’s EV losses because lower prices for new Teslas reduced the market value of comparable used Teslas in Hertz’s fleet. Hertz bought EVs as depreciating business assets, so a lower resale price directly reduced the amount the company could recover when selling those vehicles.
Hertz’s 2023 Form 10-K recorded a $245 million write-down related to the EV disposal group classified as held for sale. The write-down was not simply a measure of how much renters liked or disliked electric cars. It reflected the reduced economics of assets that Hertz expected to sell, including the effect of lower residual values.
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The risk was especially significant because Hertz had concentrated a substantial fleet purchase around one manufacturer and one highly visible vehicle strategy. When Tesla changed new-car prices, the effect reached the used-vehicle market at the same time that Hertz was trying to dispose of a large number of similar cars.
Why was Hertz selling its electric cars?
Hertz was selling electric cars because the company concluded that its EV fleet was not producing the demand, utilization, resale value, and operating profitability required for the earlier expansion target. Hertz identified several connected problems rather than one single failure.
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Residual value is the amount a fleet operator expects to recover when selling a vehicle after using it for rentals. Tesla’s price reductions lowered the expected resale value of used Teslas, forcing Hertz to recognize more depreciation and the $245 million 2023 write-down.
Collision and damage costs
Hertz also identified collision and damage expense associated with EVs as a material problem. A rental vehicle can have strong customer demand and still lose money if accident repairs, parts availability, labor, or repair-related downtime consume too much of the rental revenue.
Hertz’s filings support the narrower conclusion that the company experienced elevated EV-related collision and damage costs. The filings do not establish a universal repair-cost percentage for all electric vehicles, so claims that every EV costs a particular multiple to repair would go beyond the evidence in this case.
Demand and utilization
Hertz said it wanted to better match EV supply with expected demand and eliminate a disproportionate number of lower-margin rentals. That explanation does not mean electric vehicles had no consumer market. It means Hertz’s particular EV fleet mix, rental patterns, and costs did not meet the company’s requirements for a large rental-fleet investment.
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Energy and maintenance savings were not enough
Electric vehicles can offer lower energy or maintenance expenses in some operating conditions, but those savings are only part of fleet economics. Hertz also had to account for acquisition and financing costs, resale values, repair expense, downtime, utilization, charging operations, and the EBITDA produced by each rental day. Lower running costs could not compensate for the combination of depreciation and damage-related expense that Hertz disclosed.
How much money did Hertz lose on electric vehicles?
Hertz recorded a $245 million EV-related write-down for the disposal group classified as held for sale in its 2023 Form 10-K. Hertz also reported $195 million of EV-related depreciation in the first quarter of 2024. Those figures describe different accounting disclosures and should not be added together as though they were one single loss figure.
Hertz later reported $223 million of incremental net depreciation for 2024. The $223 million figure belongs to the 2024 reporting period and is distinct from the $245 million 2023 write-down and the $195 million first-quarter 2024 EV-related depreciation figure. Hertz’s full-year 2024 results provide the later status of the fleet reduction.
| Figure | Reporting period | What it represents |
|---|---|---|
| $245 million | 2023 | Write-down related to the EV disposal group classified as held for sale. |
| $195 million | First quarter 2024 | EV-related depreciation reported by Hertz. |
| $223 million | 2024 | Incremental net depreciation reported for the year; this is a separate disclosure from the 2023 write-down. |
Was Stephen Scherr fired over the Tesla strategy?
Stephen Scherr was not described as fired over the Tesla strategy in Hertz’s official SEC filing. The March 2024 Form 8-K says Scherr voluntarily resigned effective March 31, 2024, and says the resignation was not due to disagreement with Hertz over its operations, policies, or practices.
The available evidence does not rule out business pressure or the possibility that the EV reversal influenced the leadership transition. It does rule out presenting a board-ordered removal or termination for cause as an established fact. A precise account must separate the documented departure terms from the surrounding business context.
Who replaced Stephen Scherr at Hertz?
Wayne “Gil” West replaced Stephen Scherr as Hertz CEO on April 1, 2024, and joined Hertz’s board. Before joining Hertz, West had been chief operating officer of Cruise and had held senior operating roles at Delta Air Lines.
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Hertz described West’s mandate in terms of revenue and EBITDA growth. His background and the stated mandate suggested a stronger emphasis on execution, fleet economics, and operating discipline after the company’s EV expansion generated substantial losses. Hertz’s appointment announcement contains the company’s description of the transition and West’s background.
Did Hertz abandon electric vehicles completely?
Hertz did not announce the elimination of every electric vehicle from its fleet. Hertz announced a significant reduction of 30,000 EVs and later said that reduction was completed during 2024, but the company’s filings do not support the broader claim that Hertz abandoned EVs altogether.
The strategic change was a move away from the earlier scale and concentration of the Tesla-led plan. Hertz could still retain or operate some EVs while reducing the number of vehicles that produced unacceptable returns. Fleet reduction and complete abandonment are different outcomes.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What can other rental fleets learn from Hertz’s EV reversal?
Hertz’s experience shows why fleet electrification should be evaluated as an asset-allocation decision rather than only as a technology or sustainability decision. A vehicle that works well for a private owner may not produce acceptable returns when exposed to rental-fleet mileage, frequent drivers, damage claims, downtime, and rapid changes in new-vehicle pricing.
| Decision factor | Question a fleet operator should answer | Why the Hertz case makes it important |
|---|---|---|
| Acquisition and financing | What is the all-in cost of acquiring and financing each vehicle? | A low operating cost cannot offset an uneconomic purchase price. |
| Residual value | How sensitive is the expected resale value to manufacturer price cuts? | Tesla price reductions reduced the value of comparable used vehicles. |
| Collision repair | What are the repair, parts, labor, and downtime assumptions? | Hertz identified collision and damage costs as a material EV-fleet problem. |
| Demand and utilization | Will customers rent enough of the fleet at profitable rates? | Hertz said it needed to better balance EV supply with expected demand. |
| Energy and maintenance | How much do charging, energy, and maintenance costs save per rental day? | Operating savings must be measured against the complete ownership and rental cycle. |
| Concentration risk | What happens if one manufacturer changes prices or vehicle values fall? | A large, concentrated purchase can magnify residual-value losses. |
| EBITDA test | Does each vehicle produce acceptable EBITDA under realistic resale assumptions? | Scherr said during Hertz’s October 26, 2023 earnings call: “There’s no world in which we’re going to buy Teslas to achieve a 0 EBITDA margin.” The earnings-call transcript records the statement. |
What is the clearest explanation of the Hertz Tesla debacle?
The clearest explanation is that Hertz made a large, concentrated EV purchase and then faced an unfavorable combination of falling used-Tesla values, expensive collision and damage costs, and rental economics that did not justify the planned fleet scale. The problem was not proven universal renter rejection of EVs, and the available filings do not provide a verified percentage measuring customer dislike of Hertz Teslas.
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Scherr’s departure became a symbol of the reversal because he led Hertz during the period surrounding the EV expansion and the subsequent sell-down. The documented facts are more precise: Scherr resigned voluntarily, West replaced him, Hertz recorded substantial EV-related depreciation and a write-down, and Hertz completed a 30,000-vehicle EV reduction during 2024.
Frequently Asked Questions
Was Hertz CEO Stephen Scherr fired over the Tesla EV strategy?
Stephen Scherr voluntarily resigned as Hertz CEO effective March 31, 2024. Hertz’s SEC filing says the resignation was not caused by disagreement with the company over operations, policies, or practices, so the available official record does not support saying he was fired over Tesla.
Who replaced Stephen Scherr as Hertz CEO?
Wayne “Gil” West became Hertz CEO on April 1, 2024, after serving as chief operating officer of Cruise and holding senior operating roles at Delta Air Lines.
What happened to Hertz’s 100,000 Tesla order?
Hertz announced plans to buy 100,000 Tesla vehicles by the end of 2022, later reduced its EV fleet-reduction target to 30,000 vehicles, and reported that the 30,000-vehicle reduction was completed during 2024.
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How much money did Hertz lose on electric vehicles?
Hertz’s 2023 Form 10-K recorded a $245 million write-down related to its EV disposal group classified as held for sale. Hertz also reported $195 million of EV-related depreciation in the first quarter of 2024; the figures are separate disclosures, not one combined loss.
The Bottom Line
Stephen Scherr stepped down as Hertz CEO on March 31, 2024, and Gil West took over on April 1. Hertz did not say Scherr was fired over the Tesla strategy. Hertz’s 100,000-vehicle EV ambition was reversed because Tesla price cuts damaged residual values, collision and damage costs were high, and the fleet’s demand and profitability did not support the original scale.
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