Company: TRUE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001327318-25-000065
Chunk: 84

Company: TrueCar, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part II, Item 1A
Chunk 84
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 parts and certain raw materials used in manufacturing automobiles, such as aluminum, steel and copper. Although the full impact of these tariffs remains unclear, tariffs may increase the cost of importing or manufacturing automobiles or automobiles parts and could result in lower inventory levels, place negative pressure on automotive supply chains, and increase costs to dealers and consumers, all of which can negatively impact our business, results of operations and prospects. 

In the past, reductions in inventory have had negative impacts on our business and results. For example, starting in 2020, the automotive industry experienced a decline in inventory supply due to disruptions related to the coronavirus pandemic that resulted in shortages of critical parts, such as automotive semiconductor chips. Despite improvements in inventory levels beginning in the latter half of 2022 that led to inventory supply in the fourth quarter of 2024 at the highest levels since June 2020, industry-wide levels still have not reached historic levels and certain manufacturers have experienced slower recoveries in inventory levels than others. In light of newly announced tariffs on automobiles and automobiles parts, we cannot guarantee that inventory supply will ever return to historic levels. The limited supply of inventory also led to an increase in wholesale auction prices and the prices that dealers charge consumers for automobiles.

Reduced inventory and increased prices have had, and may have in the future, whether as the result of tariffs or otherwise, several negative effects on our business. These effects include, but are not limited to: a reduction in dealers’ willingness to participate in our network and corresponding pressure on our dealer count and revenue; an increase in competition for dealers’ marketing spending; a reduction in automobile manufacturers’ incentive spending and willingness to partner with us on incentives; an adverse effect on consumer satisfaction with our services due to high vehicle prices; and an adverse impact on the amount of inventory available on our sites, all of which negatively impact our business. We cannot predict when, if ever, the impacts from these automobile inventory-related issues will fully subside, nor can we predict the full impact that tariffs may have on inventory levels and pricing. Unless our business is able to recover from the ensuing adverse effects, there will likely be continued adverse impacts on our business, results of operations and prospects, which may further escalate as the result of the impact of tariffs.

Labor disputes, strikes or similar activities, whether impacting automobile manufacturers, their suppliers, or the supply chains through which automobiles and their components are delivered may have an adverse impact on our business if such disruptions result in reduced automobile inventory supply, an increase in the prices of automobiles or otherwise reduce the