In a dramatic turn of events, Herz CEO Steven Sher is set to step down from his position, according to a Bloomberg report. This decision comes after a turbulent period for the company, marked by a significant financial setback stemming from its ambitious foray into electric vehicles.

The repercussions of Herz’s ill-fated bet on electric vehicles have been felt across the organization, and the company is now scrambling to mitigate the fallout. Former Chief Operating Officer Gil West is slated to take over as CEO, signaling a strategic shift in leadership as Herz navigates turbulent waters.

Once touted as a visionary move, the company’s dalliance with electric vehicles has proven to be a costly misstep. Herz incurred a staggering $245 million charge in the fourth quarter, far exceeding market expectations, as the depreciation of electric cars, particularly Teslas, took a toll on profitability. Lower rental returns and higher repair costs have exacerbated Herz’s financial woes, casting a shadow over Sher’s tenure as CEO.

While Sher’s departure may surprise some, industry analysts point to underlying tensions over Herz’s electric vehicle strategy. Nighthead and Centu, the private equity firms that acquired Herz and oversaw its transformation through bankruptcy, had hoped Sher would execute their vision. However, disagreements over handling the electric vehicle initiative appear to have soured relations, culminating in Sher’s exit from the company.

With Gil West poised to take the helm, speculation about Herz’s future direction abounds. Some observers suggest that the company may be reevaluating its commitment to electric vehicles, with a potential pivot towards self-driving cars under West’s leadership. West’s background, including stints at Delta Airlines and GM’s Cruise Robo taxi unit, underscores his expertise in consumer-focused industries, offering insights into Herz’s potential strategic realignment.

However, challenges loom large on the horizon for West and Herz alike. The rental car industry is notoriously volatile, with success contingent upon astute vehicle purchasing decisions and market timing. As Herz grapples with the aftermath of its electric vehicle debacle, West must chart a course that steers the company back to profitability and restores investor confidence.

The impending leadership transition at Herz underscores the high stakes involved in navigating the rapidly evolving automotive industry. With electric vehicles and self-driving cars poised to reshape the future of transportation, Herz finds itself at a critical juncture where strategic vision and decisive action will determine its fate in an increasingly competitive market.