Hertz, Tesla and the Perils of CEO Groupthink

Hertz announced to much fanfare on Oct. 25, 2021, that it planned to buy 100,000 Teslas. “Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” then-CEO Mark Fields said. The share prices of both companies popped, and Tesla’s market capitalization surged past $1 trillion, exceeding the valuations of nearly all traditional automakers combined.

C-suite executives praised the announcement. “Kudos to Mark Fields and the Hertz team for steering a great American brand into the electric and connected future,” Ford CEO Jim Farley tweeted. Hertz had emerged from Chapter 11 bankruptcy only a few months earlier. It was betting on electric vehicles to power its revival.