Company: SDAWW
Filing Date: 2025-05-21
Form Type: 6-K
Source: 0001213900-25-046449
Chunk: 36

Company: SunCar Technology Group Inc.
Filing Date: 2025-05-21
Form: 6-K
Chunk 36
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 Inflationary Pressures We face two types of possible inflationary pressure: a general pressure from an inflation-related economic slowdown, and a specific pressure from inflation on the price of fuel. First, we consider the impact of inflation on the business is immaterial as the operations are in China and China’s inflation rates have been relatively stable in the last three years and the first quarter of the year ended December 31, 2025: approximately 2.0%, 0.2% and 0.2%for the years ended December 31, 2022, 2023 and 2024, respectively and negative 0.1% for the three months ended March 31, 2025,. Second, since the 2022 inflation episode was triggered by the conflict in Ukraine and the resulting increase in fossil fuel prices, it specifically impacts the automobile industry which still primarily relies on fossil fuel to power vehicles. Thus, with increasing fuel price, people may drive less and fewer people may choose to buy cars. As such, automotive-related industries, including insurance, technology services, and auto service industries, where we operate, would also be adversely impacted. However, we anticipate the pressure to be limited, since we have been working with car manufacturers directly and indirectly require the insurance companies to develop insurance products designed for EVs. We believe that, as EVs become increasingly popular, insurance for EVs can effectively increase our revenues and offset the adverse impact brought by the increased fuel prices. 2 Critical Accounting Estimates We prepare our unaudited condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates, and assumptions. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates and assumptions on our historical data and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates and assumptions on an ongoing basis. Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable and accurate, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. The critical accounting policies, judgments, and estimates that we believe to have the most significant impact on our unaudited