What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-14 · 104 added, 71 removed, 249 unchanged (41% of the section changed)

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Availability and demand for and pricing of our products and services may be adversely impacted by economic conditions, financial developments including rising inflation, high energy prices, increasing interest rates, a potential recessionary environment and other factors.

The automotive retail industry, and especially vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, supply conditions, consumer transportation preferences, unemployment rates and credit availability.

The automotive retail industry, and especially vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, exchange rates, fuel prices, technology and business model changes, new OEM entrants, supply conditions, consumer transportation preferences, unemployment rates and credit availability.

Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern about manufacturer viability.

Increased tariffs may increase inflation, which would likely result in interest rates not decreasing as fast as expected and consumer demand declining as a result of increased costs of vehicle ownership.

The global economy experienced elevated levels of inflation beginning in 2022.

The global economy has experienced elevated levels of inflation in recent years.

In response to higher than historical average inflationary pressures and challenging macroeconomic conditions, the U.S.

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In 2024, inflation began to return to historical norms.

As a result, during the Current Year, the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment.

As a result, during the year ended December 31, 2024 (“Prior Year”), the Federal Reserve and the Bank of England lowered their interest rates by 100 and 50 basis points, respectively, and during the Current Year, further lowered their interest rates by 75 and 100 basis points, respectively, in an effort to stimulate economic activity and reduce unemployment.

The impact of the lowering of interest rates on the levels of inflation and unemployment in the U.S., U.K.

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The impact of these macroeconomic developments on our operations cannot be predicted with certainty.

On January 29, 2025, the Federal Reserve held rates unchanged.

On February 6, 2025, the Bank of England lowered interest rates by 25 basis points.

Additionally, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.

Inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles and services.

Inflation, increased energy costs and a prolonged recession could adversely impact our operations, the operations of our suppliers and customer demand for our vehicles, parts and services.

The risk of slower future interest rate cuts or the maintenance of interest rates at current elevated levels could have a material adverse impact on our interest expense and ability to obtain financing through the debt markets, as well as consumers’ ability to obtain financing for the purchase of new and used vehicles.

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where we maintain our operations.

While EV sales continued to increase in the U.S.

in 2024, challenges with EV technologies, including the development of the necessary charging infrastructure, continue to make headlines within the U.S.

media market, raising concerns around consumer demand and interest in the products.

Should EV demand decline at the same time as more OEMs transiti on to EV models, this could have a material adverse effect on our business and results of operations.

In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate.

While EV sales grew in prior years, EV demand began to stabilize in 2025 in the U.S.

Consumers continue to express concerns with respect to access to charging infrastructure, affordability and battery range, which may limit broader adoption of EVs.

If EV demand remains uncertain while OEMs continue to shift product strategies and production plans, there could be a material adverse effect on our business and results of operations.

In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate and the OBBBA, which was signed into law in July 2025, eliminates multiple credits previously made available for new and used EVs.

Significant shifts to increase or decrease EV demand could have material impacts on the operations of our OEM partners, which could lead to a material adverse effect on our dealership business and our results of operations.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA.

government has established mandated targets for the sale of new zero emissions vehicles with increasing targets in future years.

The overall U.K.

market fell short of those mandated targets in 2024, with consumer preferences skewed towards traditional internal combustion engine vehicles.

The government targets established for 2026 are higher than those previously required in 2025 and are expected to further challenge new vehicle sales in 2026 and beyond.

These EV mandates could impact our vehicle manufacturers’ production mix and volumes, which in turn may impact our new vehicle sales and results of operations.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding the EV mandate.

Existing and potential new trade policies, such as tariffs, could adversely affect our operations, costs and business.

President Donald Trump has issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders, including those related to tariffs.

While the possibility exists for delays, reductions or exemptions of the automotive and reciprocal tariffs, the potential impacts of the tariffs described above remain uncertain and may cause a significant impact on the affordability of our products as well as the future mix of and demand for vehicles provided by our manufacturers, as well as alter the mix of supply and demand for used vehicles.

To the extent any such tariffs remain in place for a sustained period of time, or in the event a global or domestic recession results therefrom, the disposable income of our customers could be significantly reduced, which may result in our customers deciding to delay new or used vehicle purchases or vehicle maintenance and repairs, or forego them entirely, each of which could adversely affect our results of operations and financial condition.

Additionally, reciprocal tariffs, tariffs on steel, aluminum, copper and other materials and the elevated tariffs against China could negatively impact business or consumer sentiment, demand for our products, our manufacturers’ global supply chains and the U.S.

or global economy generally.

Manufacturers’ supply chain dependencies and production facility locations vary (and planned facility locations may, in response to threatened tariffs and trade barriers, be changed), and as a result, certain manufacturers could be impacted more significantly by the imposition of tariffs than others.

Additional actions taken by the U.S.

that restrict or could impact the economics of trade — including additional tariffs, trade barriers and other similar measures — could have the potential to further disrupt existing supply chains and trigger retaliatory efforts by other countries, including the imposition of tariffs, raising taxation, setting foreign exchange or capital controls, or establishing embargoes, sanctions, or other import/export restrictions, thereby negatively impacting our business, both directly and indirectly.

These developments, or the possibility that more of them could occur, may materially create or increase business uncertainty and could adversely affect the global economy and stability of global financial markets, potentially reducing trade and depressing economic activity, including demand for our products.

Such changes in international trade policies may result in direct impacts to our business or indirectly to our customers or suppliers through increased costs, changes in business prospects or operating results, which could adversely affect our financial condition.

The extent of such impacts cannot be predicted at this time.

Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition.

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Manufacturers generally support their franchisees by providing direct financial assistance in various areas, including, among others, incentives, floorplan assistance and advertising assistance.

A discontinuation or change in our manufacturers’ warranty and incentive programs could adversely affect our business.

Certain of our OEM partners, including Toyota, have recently announced their intention to reduce these forms of dealership financial assistance in order to improve their profitability.

If our OEM partners reduce or eliminate such incentives or increase the prices of their products, it could negatively impact consumer demand for new vehicles and adversely affect our sales volumes and profitability.

Additionally, a discontinuation or material change in our manufacturers’ warranty and incentive programs could adversely affect our business.

Manufacturers also provide product warranties and, in some cases, service contracts to customers.

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In addition, we rely on manufacturers for various financing programs, OEM replacement parts, training, up-to-date product design, development of advertising materials and programs and other items necessary for the success of our dealerships.

Vehicle manufacturers may be adversely impacted by economic downturns or recessions, significant declines in the sales of their new vehicles, increases in interest rates, adverse fluctuations in currency exchange rates, declines in their credit ratings, reductions in access to capital or credit, labor strikes or similar disruptions (including within their major suppliers), supply shortages, rising raw material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products, including due to bankruptcy, product defects, litigation, ability to keep up with technology and business model changes, poor product mix or unappealing vehicle design, governmental laws and regulations, natural disasters or other adverse events.

aluminum production facility in 2025, cybersecurity incidents or other adverse events.

In particular, all of our OEMs are investing material amounts to develop electric and autonomous vehicles.

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The OEMs have been and could continue to be impacted by disruptions to the economy, lower than anticipated EV adoption, higher supply chain costs than emerging EV manufacturer competitors, delays in increasing factory production, labor negotiations, parts shortages, including semiconductor chips, and other disruptions.

In the Current Year, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s.

Since 2024, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s.

These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition.

During the Current Year, the majority of our manufacturers’ production increased, driving an improvement in vehicles days’ supply.

Since 2024, the majority of our manufacturers’ production increased, driving an improvement in vehicles days’ supply.

Our new vehicle days’ supply of inventory was approximately 46 days as of December 31, 2025, as compared to 44 days and 37 days for the years ended December 31, 2024 and 2023, respectively.

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Any significant increase in existing tariffs on such goods and raw materials, or implementation of new tariffs, could increase production costs for OEM’s that would then be passed on to consumers, potentially leading to higher vehicle prices and reduced demand, which in turn could adversely affect our profits on the vehicles we sell.

Additionally, the tariffs and other market developments could potentially cause our current OEM’s to lose market share to emerging EV-only OEM’s.

Additionally, the tariffs and other market developments could potentially cause our current OEMs to lose market share to emerging EV-only OEMs.

Market share losses could not only impair our sales and profits but lead to potential impairments.

In addition, we may face increased competition in the markets in which we operate from vehicle manufacturers not currently represented in our dealership portfolio, including emerging Chinese automotive manufacturers.

In the U.K., Chinese-branded vehicles have increased their share of new vehicle sales in recent periods, growing from approximately 8% in 2024 to approximately 13% in 2025.

These manufacturers often compete aggressively on price and have expanded their offerings, including electric and hybrid vehicles, which may appeal to certain customer segments.

While Chinese automotive brands currently have a limited presence in the U.S., similar competitive dynamics could develop over time.

Increases in market share by new manufacturers, such as Chinese automotive brands, in either the U.K.

or the U.S., could reduce demand for the vehicles we sell, increase competitive pressure on pricing and margins and adversely affect new vehicle sales volumes at our dealerships.

These factors could have a material adverse effect on our business, results of operations and financial condition.

If we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired.

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These agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including network consolidation plans, any unapproved changes of ownership or management, sales and customer satisfaction performance deficiencies and other material breaches of the franchise agreements.

For example, in the U.K., the Volkswagen Group has disclosed a five-year plan to reduce the number of partners in its dealer network.

That plan may require us to dispose of, or close, up to thirteen of our Volkswagen and up to three Audi dealerships.

For example, in 2023, in the U.K., an OEM disclosed a five-year plan to reduce the number of partners in its dealer network.

That plan may require us to dispose of, or close, up to 16 of our dealerships.

Correspondingly, the plan may require us to purchase dealerships adjacent to our territories.

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Customers are using the internet to compare prices for new and used vehicles, automotive repair and maintenance services, finance and insurance products and other automotive products.

If we are unable to effectively use the internet to attract customers to our own online channels, such as our AcceleRide® platform, and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.

If we are unable to effectively use the internet to attract customers to our own online channels and mobile applications, and, in turn, to our stores, our business, financial condition, results of operations and cash flows could be materially adversely affected.

The use of social media by consumers increases the speed and extent that information and opinions can be shared, and negative posts or comments on social media about the Company or any of our dealerships could damage our reputation and brand names, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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• failing to retain key personnel of the acquired dealerships;

• failing to implement or improve controls and policies and information systems;

• failing to implement or improve controls and policies and information systems (“IT”);

• impairing relationships with employees, manufacturers and customers;

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Our management devotes a substantial amount of time and attention to the process of integrating the operations of acquired dealerships into our business.

Additionally, the Company doubled its footprint in the U.K.

during the Current Year through its acquisition of Inchcape Retail.

Failure to effectively integrate the Inchcape Acquisition into the legacy U.K.

operations could negatively impact our operating results in the U.K.

If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain run-rate revenue and expense synergies expected to result from acquisitions, might not be met.

If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain revenue and expense synergies expected to result from acquisitions, might not be met.

As a result, we may not be able to realize the expected benefits that we seek to achieve from the acquisitions.

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Vehicle manufacturers may alter their distribution models.

In 2023, Mercedes Benz transitioned to an agency model for distribution of vehicles in the U.K.

Certain vehicle manufacturers have adopted an agency model for distribution of vehicles in the U.K.

after collaborating with various automotive retailers and conducting pilot programs.

In addition to the transition by Mercedes Benz in the U.K., certain of our other vehicle manufacturers serving the U.K.

In addition, other vehicle manufacturers serving the U.K.

markets have announced plans to explore an agency model for selling new vehicles.

Under an agency model, our franchised dealerships receive a fee for facilitating the sale of a new vehicle to a customer but no longer record the vehicle sales price as revenue, record vehicles in inventory or incur floorplan interest expense, as has been historical practice.

The agency model, as adopted by Mercedes Benz, resulted in reduced revenues, as we act as an agent of Mercedes Benz, receiving a commission for each sale and other expense fee support.

We did not experience a material negative or positive impact to the U.K.

region gross margin and consolidated results of operations as a result of the change to the Mercedes Benz agency model.

Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those contracted by Mercedes Benz.

The agency model, if adopted by other manufacturers, would reduce revenues with only the facilitation fee recorded as revenue.

Agency models adopted by vehicle manufacturers have resulted in reduced revenues, as we act as an agent of the vehicle manufacturer, receiving a commission for each sale and other expense fee support.

We have not experienced a material negative or positive impact to the U.K.

gross margin and consolidated results of operations as a result of the change to the agency model.

Notwithstanding this fact, we cannot predict the actions of other manufacturers and whether the agency models proposed by them will have the same terms and conditions as those currently in effect.

The agency model, if adopted by additional manufacturers, would reduce revenues with only the facilitation fee recorded as revenue.

The other impacts to our U.K.

regions and consolidated results of operations remain uncertain until such time as the other vehicle manufacturers provide additional details regarding their specific agency model plans.

segments and consolidated results of operations remain uncertain until such time as vehicle manufacturers provide additional details regarding their specific agency model plans.

We are uncertain if agency models will be widely adopted in the U.K.

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For example, in June 2024, CDK Global LLC (“CDK”) experienced a cybersecurity event, which resulted in service outages on CDK’s dealers’ systems including our CDK DMS.

If any of our vendors or suppliers fail to deliver their products or services for any reason, our business and results of operations and financial condition could be adversely impacted.

A failure of any of our information systems or those of our third-party service providers or a cybersecurity incident, including loss or unauthorized access of confidential information or PII about our customers or employees, could negatively affect our business, operations and financial condition.

We depend on the efficient operation of our information systems and those of our third-party service providers and rely on information systems at our dealerships in all aspects of our sales and service efforts, as well as in the preparation of our consolidated financial and operating data.

If any of our vendors or suppliers fail to deliver their products or services for any reason, our business and results of operations and financial condition could be materially and adversely impacted.

A failure of any of our IT or those of our third-party service providers or a cybersecurity incident, including loss or unauthorized access of confidential information or PII about our customers or employees, could negatively affect our business, operations and financial condition.

We depend on the efficient operation of our IT and those of our third-party service providers and rely on IT at our dealerships in all aspects of our sales and service efforts, as well as in the preparation of our consolidated financial and operating data.

All of our dealerships currently operate on two DMSs, one DMS for the U.S.

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Additionally, in the ordinary course of business, we receive significant PII about our customers and our employees.

PII is primarily collected at our dealerships and through our AcceleRide® platform via an online DMS.

PII is primarily collected at our dealerships and through our digital platform via an online DMS.

A cybersecurity attack to obtain such information could be caused by malicious insiders and third parties using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, malware, fraud, trickery, or other forms of deception.

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In addition, security breaches and other security incidents could expose us to a risk of loss or exposure of this information, which could result in potential liability, investigations, regulatory fines, penalties for violation of applicable laws or regulations, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, administrative, civil or criminal investigations or actions, any of which could have a material adverse effect on our business, results of operations or financial condition.

Likewise, our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party information systems, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time or (ii) our relationship with our DMS providers or any other third-party provider deteriorates.

Likewise, our business could be significantly disrupted if (i) the DMS fails to integrate with other third-party IT, customer relations management tools or other software, or to the extent that any of these systems become unavailable to us or fail to perform as designed for an extended period of time or (ii) our relationship with our DMS providers or any other third-party provider deteriorates.

Despite ongoing efforts to improve our ability to protect data from compromise, we may not be able to protect all of our data across our diverse systems and third-party vendors.

For example, during the quarter ended June 30, 2024, we were informed of a cybersecurity incident experienced by CDK, which resulted in service outages on CDK’s dealers’ systems (the “CDK Incident”).

CDK provides clients in the automotive industry, including our dealerships in the U.S., with a software as a service platform (“SaaS platform”) used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations.

CDK provides clients in the automotive industry, including our dealerships in the U.S., with a software as a service platform used by dealerships in managing customer relationships, sales, financing, service, inventory and back-office operations.

In response to the CDK Incident, we immediately activated our cyber incident response procedures and proactively took measures to protect and isolate our systems from CDK’s platform.

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Although many companies across many industries are affected by malicious efforts to obtain access to PII, the automotive dealership industry has been a particular target of identity thieves.

Although many companies across many industries are affected by malicious efforts to obtain access to PII, the automotive dealership industry and overall retail industry have been a particular target of identity thieves.

The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time.

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We have operations in the U.K.

and as a result, we face political and economic risks and uncertainties with respect to our international operations.

and as a result, we may face political and economic risks and uncertainties with respect to our international operations.

These risks may include, but are not limited to:

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• fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility;

• infrastructure readiness for the U.K.’s transition to EVs.

• infrastructure challenges associated with the U.K.’s transition to EVs.

We may fail to meet analyst and investor expectations, which could cause the price of our stock to decline.

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Significant increases in fuel economy requirements, new federal or state restrictions on emissions of carbon dioxide or new federal or state incentive programs that have or may be imposed on vehicles and automobile fuels could adversely affect demand for certain vehicles, annual miles driven or the products we sell.

For example, on March 20, 2024, the EPA finalized new emissions standards establishing more stringent air emissions limits for light and medium-duty vehicles, which include passenger cars, vans, pickups, sedans and SUVs for model years 2027 through 2032.

However, vehicle fuel economy standards, and the ability of federal and state agencies to set fuel economy standards, have recently been subject to significant uncertainty.

In August 2025, the EPA issued a proposed rule to rescind the “Endangerment Finding,” which underpins the majority of the EPA’s GHG regulations, and all GHG emission standards for light-duty, medium-duty, and heavy-duty vehicles and engines.

We cannot predict whether such efforts will ultimately be successful.

Moreover, in December 2025, NHTSA published a proposed rule to amend the fuel economy standards for light-duty vehicles for model years 2022 to 2031.

The proposed rule rolls back future model year fuel economy targets, reduces annual increases and removes the consideration of the availability of alternative fuel technology, including EVs, from the fuel economy targets, though the substance and timing of the final rule is uncertain.

However, any future standards that result in stricter fuel economy standards could significantly increase our costs of operation as well as reduce our volume of business.

Representatives of the U.K.

government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2035.

government have committed to a ban on the sale of new gasoline and diesel cars after 2030, with all new cars and vans required to be fully zero-emission by 2035, although proposals have since been made to rescind or dramatically scale back the ban.

These and similar proposals may have a significant impact on the future mix of vehicles provided by our manufacturers.

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If consumer demand increases for fuel efficient vehicles or EVs and our manufacturers are not able to adapt and produce vehicles that meet the customer demands or we are unable to align with the manufacturers of these vehicles, such events could adversely affect our new and used vehicle sales volumes, parts and service revenues and our results of operations.

In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate.

However, incentives for EVs have recently been subject to significant change and uncertainty.

President Donald Trump issued a series of executive orders since taking office in January 2025, including an executive order eliminating the EV mandate and the OBBBA eliminates multiple credits previously made available for new and used EVs.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA.

Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.

The CCDAA requires both public and private U.S.

companies that are “doing business in California” and that have a total annual revenue of $1 billion to publicly disclose and verify, on an annual basis, Scope 1, 2 and 3 GHG emissions.

In September 2024, the Governor of California signed into law the Climate Corporate Accountability:

Climate-Related Financial Risk Act, which amends certain climate disclosure requirements in CCDAA.

The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-relate disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.

Reporting under both laws would begin in 2026.

Currently, we are assessing the impact of these laws on our business and there are legal challenges to be filed with respect to the scope of the law.

However, absent clarification or revisions to the law, finalization and implementation may result in additional costs to comply with these disclosure requirements, as well as increased costs of and restrictions on access to capital for us or our customers.

Further, the SEC released its final rule on climate-related disclosures on March 6, 2024, requiring the disclosure of certain climate-related risks and financial impacts, as well as GHG emissions.

Under the rule, large accelerated filers would be required to incorporate the applicable climate-related disclosures into their filings beginning in fiscal year 2025, with additional requirements relating to the disclosure of Scope 1 and 2 GHG emissions, if material, and attestation reports for certain large accelerated filers subsequently phasing in.

However, the future of the SEC climate rule is uncertain at this time given that its implementation has been stayed pending the outcome of legal challenges;

moreover, it is uncertain whether the Commission may seek to change or revoke the rule though we cannot predict whether such action will occur or its timing.

In addition, the Trump Administration may take action with respect to these climate-related disclosures, the outcome of which we cannot predict with certainty.

As a result, the ultimate impact of the SEC rule, or any similar climate-related disclosure requirements imposed in the future, on our business is uncertain and may result in increased compliance costs and increased costs of and restrictions on access to capital.

companies that are “doing business in California” and that have a total annual revenue of $1 billion to publicly disclose and verify, on an annual basis, Scope 1, 2 and 3 GHG emissions, with reporting required on or before August 10, 2026.

The CRFRA requires the disclosure of a climate-related financial risk report (in line with the Task Force on the Climate-related Financial Disclosures recommendations or equivalent disclosure requirements under the International Sustainability Standards Board’s climate-related disclosure standards) every other year for public and private companies that are “doing business in California” and have total annual revenue of $500 million.

Reporting under both laws was to begin in 2026.

However, both laws are currently subject to legal challenges and on November 18, 2025, the U.S.

Court of Appeals for the Ninth Circuit enjoined the implementation of the CRFRA, leaving the deadline for the initial report under the CRFRA unclear.

Although the outcome of the legal challenges are uncertain at this time, finalization and implementation may result in additional costs to comply with these disclosure requirements, as well as increased costs of and restrictions on access to capital for us or our customers.

Increased attention to sustainability matters may adversely impact our business, reputation and access to capital.

We face increased attention and evolving expectations from investors, regulators and other stakeholders regarding sustainability matters, including climate change, environmental and social impacts, and voluntary or mandatory climate disclosures.

Increased demand for alternative forms of energy may increase costs, reduce demand for our products, and contribute to increased investigations and litigation, any of which could adversely our business.

Increased attention to climate change and environmental conservation, for example, may result in demand shifts for our products and additional governmental investigations and private litigation against us.

In some cases, liability or regulatory action may be pursued without regard to our causation of, or contribution to, the asserted harm.

While we may participate in various sustainability frameworks and certification programs, we cannot guarantee that such participation or certification will achieve intended outcomes or improve perceptions of our products or business.

Voluntary sustainability disclosures may be based on expectations, assumptions or hypothetical scenarios that are uncertain, subject to change and difficult to verify over long time horizons.

Such expectations, assumptions or hypothetical scenarios are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established approach to identifying, measuring, and reporting on many sustainability matters.

Additionally, while we may also announce various voluntary sustainability targets, such targets are often aspirational and may be subject to change depending on changed circumstances, methodologies, business forecasts or other factors.

We may not be able to meet or make progress against such targets in the manner or on such a timeline as initially contemplated, including, but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.

Despite these aspirational goals, we may receive pressure from investors, lenders, or other groups to adopt more aggressive climate or other sustainability-related goals, but we cannot guarantee that we will be able to pursue or implement such goals, in whole or in part, because of potential costs or technical or operational obstacles.

Certain public statements regarding sustainability matters are subject to increasing regulatory, litigation and political scrutiny, including allegations of “greenwashing” or challenges from so-called “anti-ESG” constituencies, which could result in investigations, enforcement actions, litigation or reputational harm.

Additionally, certain employment or business practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors.

The complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

As a result, we may face increased litigation risks from private parties and governmental authorities related to our sustainability efforts.

Such sustainability-related matters may also impact our customers or suppliers, which may adversely impact our business, financial condition, or results of operations.

Changes to laws and regulations could adversely impact our operations and financial condition.

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For example, in December 2023, the FTC adopted new regulations for automotive dealers that would prohibit a wide range of current industry-accepted sales practices with regard to sales and advertising of our vehicles and products, require an extensive series of both oral and written disclosures to be made at the initial contact in regard to the sale price of vehicles, financial terms and voluntary protection products, mandate the posting of certain pricing and other information on dealer websites, and impose burdensome recordkeeping requirements.

While the proposed rule has been vacated, if similar regulations were implemented, our failure to adhere to new policies could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.

While the proposed rule has been vacated, California has adopted its version which captures some of the disclosure and transparency goals of the FTC.

Our failure to adhere to these new rules or similar future regulations could subject the Company to significant monetary and other penalties or require us to make adjustments to our products and services, any or all of which could result in lost revenues, increased expenses and substantial adverse publicity.

These changes, if adopted as proposed, may lead to longer transaction times for the sale of vehicles, complicate the transaction process, decrease customer satisfaction, and impose recordkeeping burdens on our employees, among other effects.

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Business — Governmental Regulations for further discussion of automotive and other laws and regulations impacting our business.

Operational risks associated with environmental laws and regulations may expose us to significant costs and liabilities.

Operational risks associated with environmental, health, and safety laws and regulations may expose us to significant costs and liabilities.

Our business activities in the U.S.

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Our compliance with these regulations may expose us to significant costs and liabilities.

With a potential increase in demand by consumers for EVs, we will incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.

In addition, President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders eliminating the EV mandate and impacting environmental regulations.

With a potential increase in demand by consumers for EVs, we may incur costs and liabilities to sell and service EVs, including, but not limited to, personal protective equipment for employees, capital expenditures for specialized tools and equipment, service shop space and battery storage costs.

However, incentives related to EVs have recently been subject to change and uncertainty.

President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders eliminating the EV mandate and impacting environmental regulations, and the OBBBA eliminates multiple credits previously made available for new and used EVs.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events, for additional information regarding these executive orders and the OBBBA.

Additionally, vehicle manufacturers in the U.S.

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Refer to Item 1.

Business — Governmental Regulations for further discussion of environmental and regulations impacting our business.

Business — Governmental Regulations for further discussion of environmental regulations impacting our business.

Risks Related to Accounting Matters

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Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, increase the risk of an impairment charge, which could have a material adverse impact on ou r results of operations.

During the year ended December 31, 2025, we recorded $93.0 million of goodwill impairments.

No goodwill impairments were recorded during the years ended December 31, 2024 and 2023 .

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors