Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 520

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part II, Item 1
Chunk 520
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any updates regarding their driving record or license status. We may not identify instances of identity fraud where a Guest books a vehicle
under another person’s identity for criminal or other unlawful purposes. Furthermore, we do not conduct criminal background checks
or any other screening processes on Guests and their invitees in a vehicle booked through our platform. Given this ambiguity or potential
change, it is possible that we are not now, or may not be in the future, compliant with those laws. Further, the use of criminal background
checks or credit checks in our marketplace may open us up to allegations of discrimination. Therefore, we may be subject to negative publicity
and incur additional expenses, which could harm our business, results of operations, and financial condition.

Our exposure to exchange rate fluctuations
and the translation of local currency results into U.S. dollars could negatively impact our results of operations. 

All of our business is transacted
and/or denominated in foreign currencies, and fluctuations in currency exchange rates could have a significant impact on our results of
operations, financial condition, and cash flows. Increased currency volatility, particularly in the Indian Rupee, could also positively
or negatively impact our foreign-currency-denominated costs, assets, and liabilities. In addition, any devaluation of the Rupee relative
to other foreign currencies could increase our operating expenses, adversely affecting the results of our operations. Any of these factors
could adversely affect our financial condition and the results of our operations in the future.

The effective tax rates governing car rental
and car subscription in India could change. 

The tax environment continues
to evolve in India on a routine basis and remains relatively fluid compared to other more mature markets. The indirect tax rates associated
with the Goods and Services Tax (GST) have changed on multiple occasions since the GST’s introduction in 2017. Any further increase
in these indirect tax rates could result in a reduction in the Company’s operating cash flow, which could impair our future profitability.

110

The Indian government could reduce highway
infrastructure investments, thereby making car travel significantly less appealing. 

The Indian government is
currently investing significantly in expanding the country’s underdeveloped network of interstate highways and expressways. Compared
to more mature markets, the Indian civil infrastructure is under-invested across its 28 states and 8 Union territories. The development
of new highways and expressways makes personal car transportation considerably more desirable, as new highway infrastructure could potentially
reduce travel time and overall traffic congestion. These new highways and