Hertz, one of the four largest car rental companies in the world, is replacing its CEO after the company reversed its bet on electric vehicle (EV) rentals over increasing costs.

Stephen Scherr will step down as Hertz Global Holdings Inc.’s chief executive officer and member of the company’s Board of Directors effective March 31, the company announced Friday. Scherr led Hertz for just over two years after spending nearly three decades at Goldman Sachs.

Scherr’s resignation comes as the car rental company struggles with the higher repair costs and low demand for EV rentals.

In January, Hertz announced in financial filings that it had made the "strategic decision" to sell approximately 20,000 EVs from its U.S. fleet, or about one-third of its global EV fleet, and to instead invest in gas-powered cars.

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The Biden administration has previously lauded Hertz for its investment in EVs as the president made an aggressive push to broadly electrify the transportation sector as part of his climate agenda.

Last month, Hertz announced its biggest quarterly loss since 2020 after its decision to pivot away from EVs.

Scherr, 59, joined Hertz as the company was emerging from bankruptcy and began betting big on EVs.

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Hertz will replace Sherr with Gil West, the former Chief Operating Officer of Delta Airlines and General Motors' Cruise unit, effective April 1. 

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Scherr is working with West over the coming weeks to ensure a smooth transition, the company said.