Hertz’s electric vehicle and CEO about-face is the latest twist after a COVID bankruptcy filing and a deep relationship with Carl Icahn

It seemed like a good idea at the time. Now we know better.

Hertz, reeling from a bankruptcy and the pandemic, announced plans to buy 100,000 Teslas in late 2021. The splashy move certainly helped Elon Musk’s electric-vehicle maker, which saw its market cap surge past $1 trillion for the first time.

Hertz enjoyed a bump in its market value as well, and the car-rental giant hired NFL star Tom Brady to show off its new fleet of Teslas.

“How do we democratize access to electric vehicles? That’s a very important part of our strategy,” interim CEO Mark Fields said at the time. “Tesla is the only manufacturer that can produce EVs at scale.”

But Hertz paid close to list prices for the Teslas, rather than demanding a large discount as car-rental giants often do. That decision would come back to bite it.

Last year, Musk’s EV maker cut prices across its lineup to boost sales. That not only angered individual customers who’d recently bought a Tesla at a higher price, but it also crushed the resale value of Hertz’s used EVs.

'Elevated costs' of EVs

This January, the rental giant revealed that it was selling off 20,000 electric vehicles, noting the costly depreciation, weak demand, and pricey repairs. It took a $245 million hit and suffered its steepest quarterly loss since the pandemic.

“The elevated costs associated with EVs persisted,” Hertz CEO Stephen Scherr said at the time. “Efforts to wrestle it down proved to be more challenging.”

This week, Hertz announced that Scherr was stepping down and would be replaced by Gil West, the former COO of General Motors’ Cruise robotaxi unit. While Scherr took over after the Tesla deal, under his leadership Hertz continued its focus on EVs, placing orders for some with GM and Polestar.

The ill-fated EV push followed a difficult stretch for Hertz that culminated in billionaire activist investor Carl Icahn unloading his substantial stake in the car-rental company in 2020 days after its bankruptcy. In 2014, Icahn had begun acquiring his stake in Hertz, which was struggling. He called Hertz “a great brand” that he hoped would “return to its former glory,” and three of his allies soon had board seats, while the hunt for a new CEO began.

After selling selling his stake, Icahn said, “Yesterday I sold my equity position at a significant loss, but this does not mean that I don’t continue to have faith in the future of Hertz.”

The following year, the company announced the decision to buy Teslas. Now it's about to welcome yet another new CEO, again tasked with turning things around.

This story was originally featured on Fortune.com