The choice of Hertz to transition from a linear strategy to a more strategic approach and to sell EVs was a case study in agile business.

 The choice of Hertz to transition from a linear strategy to a more strategic approach and to sell EVs was a case study in agile business.

In October of 2022, Hertz made a significant announcement: it would devote $4.2 billion to the development of electric vehicles (EVs). The company intended to add 100,000 electric vehicles to its fleet by the end of 2023, which would make it the largest electric vehicle fleet in the rental car industry.

Hertz's choice was considered a significant investment in the future of EVs. The corporation was predicting that demand for EVs would increase, and that it would have a good chance to capitalize on that growth.

However, just eight months after the initial launch, Hertz announced that it would have to sell 20,000 of its EVs. The company attributed multiple factors to the decision, including the global shortage of chips, the high cost of gas, and the slow rate of adoption of EVs by car rental customers.

Hertz's decision to alter strategy has been criticized in different ways. Some analysts have commended the company for its flexibility in responding to evolving market conditions. Others have decried the company's lack of forethought in committing to EVs prior to their time.

Is the decision of Hertz Effective?

Whether or not Hertz's choice is considered agile is based on the definition of agility that you use. If agility is characterized by the capacity to quickly alter circumstances, then Hertz's choice could be considered agile. The company was able to quickly evaluate the situation and make a alteration to its strategy.

However, if agility is considered the capacity to plan and anticipate changes, then Hertz's decision would be considered less agile. The company devoted extensive resources to EVs, despite the already observed lack of popularity of these vehicles in the real world.

The Impact of Hertz's Action on the Rental Car Industry

Hertz's choice is likely to have a significant impact on the car rental industry as a whole. The company's decision to sell EVs may inspire other car rental companies to follow suit. This would slow the growth of the EV market, as car rental companies are significant in the demand for EVs.
Hertz's choice could also lead to alterations in the way rental car companies conduct business. Rental car companies may need to concentrate on providing additional services, such as ride sharing or car sharing, in order to compete with other transportation methods.

Hertz's decision to alter strategy and sell EVs is a notable example of agile business. The company's ability to adapt to changing market conditions quickly was complemented by a significant investment in EVs that was not entirely justified. The effect of Hertz's decision on the rental car industry is still unknown.