(MT Newswires) -- In 2021, Hertz, a bankrupt car rental company, was taken over by two financial experts who decided to bet on electric cars by ordering 100,000 Tesla vehicles. This ambitious choice, initially seen as a revolution to modernise a centuries-old company, quickly turned into a costly failure.

The article reveals that the project seemed promising at the outset. The idea was to replace petrol cars with Teslas, marking Hertz's move into the 21st century. BUT, several major obstacles soon became apparent.

Firstly, demand for electric vehicles (EVs) for hire did not meet expectations. Early adopters already owned EVs, while the general public was not yet ready to take the plunge. What's more, new Tesla drivers tended to be involved in costly accidents, incurring significant costs for Hertz and immobilising the vehicles for long periods.

The situation worsened in 2023 when Elon Musk repeatedly slashed Tesla prices in a strategy to win market share, causing a rapid devaluation of Hertz's fleet and inflicting multi-million dollar losses on the company in terms of depreciation.

Faced with these challenges, Hertz decided to take a step back. The company sold off 20,000 Teslas and reintroduced petrol cars to its fleet. As part of this reorientation, Gil West, former Director of Operations at Delta Airlines, took over the reins of Hertz. He replaces Stephen Schur, former CFO of Goldman Sachs and CEO of Hertz for two years, who admits that he is not the right man for the job.

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