Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 14

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 14
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inflationary pressures: a general pressure from inflation-related economic slowdown, and a specific pressure from inflation of the prices
of fuel. First, inflation could slow down the global economy and the economic activity in China in particular, and thus decrease the over
amount of automobile usage in China which would impact our business. So far, this risk has not been realized, and we see automobile usage
in China continue to steadily grow. Second, since the 2022 inflation episode was triggered by the conflict in Ukraine and the resulting
increase in fossil fuel prices, it particularly impacts the automobile industry which still mainly relies on fossil fuel to power the
vehicles. Thus, the auto industry and related industries, including insurance and auto service industries where we operate, would face
increased cost of operation even more significant than the global economy as a whole, drive by the increase in fuel prices. Our efforts
in developing our EV (electric vehicles) business line may not be able to completely offset this risk, since EV is still a minority portion
of the entire auto industry.

Increases in labor costs and employee benefits
may adversely affect our business and profitability.

Labor costs in China have
risen in recent years as a result of social and economic development including the increasing inflation. Average wages in China are expected
to continue increasing. We may also need to increase our total compensation packages to attract and retain experienced personnel to achieve
our business objectives. In addition, we are required by the PRC laws and regulations to pay various statutory employee benefits, including
pension, housing fund, and insurance, to designated government authorities for the benefits of our employees. We may be determined by
the relevant government authorities to have failed to make adequate payments to the statutory employee benefits, due to the inconsistent
implementation or interpretation of the PRC laws and regulations by local authorities or our lack of understanding of the relevant PRC
laws and regulations. As a result, we may be subject to late payment fees or other penalties. As of the date of this Report, our PRC Operating
Entities have not been materially impacted, in part because our labor suppliers, the auto service providers, are highly fragmented and
not coordinated as US-style labor unions do not exist in the PRC. However, we expect that our labor costs, including wages and employee
benefits, will continue to increase. Our financial condition and results of operations may be adversely affected as a result of any material
increase in our labor costs.

We are subject to customer concentration
risk. Our growth and