Company: TRUE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001327318-25-000006
Chunk: 60

Company: TrueCar, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1A
Chunk 60
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Table of Contents

Item 1A.    Risk Factors 

Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this report, including our consolidated financial statements and related notes, and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making an investment in our common stock. If any of the following risks is realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose part or all of your investment. Additional risks and uncertainties not presently known to us or not believed by us to be material could also impact us.

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Risks Related to Our Business and Industry

Our business is subject to risks related to the larger automotive ecosystem, including inventory and global supply chain challenges, labor and other factors.

Our business is sensitive to adverse conditions affecting automobile dealers, manufacturers, their suppliers and the market for automobiles in the United States. 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 pre-pandemic levels and certain manufacturers have experienced slower recoveries in inventory levels than others. We cannot guarantee that inventory supply will ever fully return to historic levels. Furthermore, the imposition of tariffs by the United States government could result in lower imports of automobiles or shortages of critical parts, causing additional pressure on the supply chain and lower inventory levels. The limited supply of inventory also led to an increase in wholesale auction prices and the prices that dealers charge consumers for automobiles.

The reduced inventory and increased prices have had several negative effects on our business, which may persist even as inventory shortages subside. 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