2025 Pub. 7 Issue 1

2025 ISSUE 1 Official Publication of the California New Car Dealers Association 12 Photos From CNCDA's Welcome Reception at NADA Show 18 MANNING LEAVER LEGAL LANE The Importance of Shareholder Agreements 24 The CNCDA Foundation We’re Not Just Filling Jobs

BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations FERRUZZO.COM | CALIFORNIA | TEXAS Business Transactions • Buy-Sell Agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations Employment Practices • Arbitration agreements • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Employee handbooks and compliance Estate Planning • Succession planning for business continuation • Family estate planning (wills and trusts) Tax • Property tax planning, audits and appeals • EDD audits Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisitions and lease agreements • Lender opinion letters An Automotive Industry Authority For over 40 years, Ferruzzo & Ferruzzo, LLP has been a leading authority in the Automotive Industry. Our team of auto-focused attorneys provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. Solving Your Challenges, Together

6 PRESIDENT’S MESSAGE The Final Lap: Closing in on CNCDA’s Top Priorities By Brian Maas, President, CNCDA 8 2025 Officers and Directors 10 CNCDA 2025 Sponsors 12 2025 CNCDA Welcome Reception at NADA Show January 24, 2025 Le Méridien, New Orleans 18 MANNING LEAVER LEGAL LANE The Importance of Shareholder Agreements By Wade Kackstetter, Partner, Manning, Leaver, Bruder & Berberich LLP 22 CNCDA’s Donation for SoCal Wildfire Victims 23 Calibrate: A Smarter Approach to California's ZEV Mandate 24 The CNCDA Foundation We’re Not Just Filling Jobs 26 Congratulations to CNCDA’s 2025 TIME Dealer of the Year! 27 Compliance Obligations for Employers During Wildfires By Scali Rasmussen PC 30 Q4 2024 California Auto Outlook ©2025 The California New Car Dealers Association (CNCDA) | The newsLINK Group LLC. All rights reserved. California New Car Dealer Quarterly is published four times per year by The newsLINK Group LLC for CNCDA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of CNCDA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. California New Car Dealer Quarterly is a collective work, and as such, some articles are submitted by authors who are independent of CNCDA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. 12 24 Contents 2025 ISSUE 1 1517 L St. Sacramento, CA 95814 www.cncda.org (916) 441-2599 Brian Maas President Michael Walsh, MBA Chief Financial Officer Anthony Bento Chief Legal Officer Autumn Heacox Director of Communications & Marketing Cathy Mason Director of Operations Rebecca Matulich Director of Events & Partnerships Kenton Stanhope Director of Government Affairs Andrea Daugherty Political Engagement Manager Lauren Johnston Membership Manager Liza Hernandez Staff Accountant Stacy Barawed Executive Assistant McKenna Bediamol Administrative Coordinator Les Swizer Legal & Regulatory Affairs Counsel Kim McPhaul CNCDA Foundation President Sonny Davey Program Coordinator

Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. DFS-699-AD 6942528 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.

PRESIDENT’S MESSAGE The Final Lap: Closing in on CNCDA’s Top Priorities As we accelerate into 2025, it’s important to reflect on CNCDA’s purpose: to protect and promote the franchise dealer system. Your dealership’s success is the foundation of our work; everything we do is focused on ensuring that your business remains strong. It is CNCDA’s responsibility to ensure your dealerships’ continued success — a mission we don’t take lightly. At the association’s Strategic Planning Retreat in 2022, a group of dealers gathered with association leadership to establish a set of guiding priorities for our association over the next 3-5 years in alignment with our overall mission. I am proud to say that with hard work and focus our team has already accomplished many of these goals in the last two years alone. • AB 473 Increased Franchise Protections: In 2023, CNCDA introduced AB 473. As one of the first of its kind in the nation, the bill enacts strict protections for our dealers, preventing manufacturers from bypassing their franchise network, among other provisions. This law has become a critical tool in our current disputes with Volkswagen’s Scout brand and ensures our members don’t have to compete with their manufacturers who may want to offer direct-to-consumer sales. AB 473 maintains a fair and competitive market for California’s dealers, and many other states are now using it as a successful model for their members. It is CNCDA’s responsibility to ensure your dealerships’ continued success — a mission we don’t take lightly. COMPLETED Brian Maas, President, CNCDA 6 California New Car Dealer Quarterly

• PAGA Reform: We tackled California’s wage and hour laws, specifically PAGA. We successfully negotiated a deal that culminated in Gov. Newsom signing legislative reform on July 1, 2024. This was an incredible victory for our dealers and a benefit for California’s business community. CNCDA dealers spearheaded the charge here, and in the process, we led the broader business community to secure real reform. • Revenue Growth: Next, we acknowledged the need to increase the association’s revenue. This was essential to provide the level of service and advocacy our dealers expect. Last year, we passed a phased dues increase. We also prioritized vendor relationships, which resulted in raising revenue significantly and providing additional benefits to our vendor partners. These resources are crucial to executing our initiatives and protecting your interests. • Document Processing Charge (DPC) — SB 791: Currently, one of our critical issues is adjusting California’s document processing charge. We are introducing bill SB 791 this year to address the issue of California’s DPC being currently the lowest in the country by a wide margin. Our plan is to simply ask for a fair and reasonable increase to meet the national average to cover our dealers’ costs but with mindfulness toward consumers. Our team is working hard on this, and we’ve placed it as one of our top issues for Dealer Day this year. We have a strong strategy in place, and with your participation and support we are optimistic that we will make progress this year. • CARB ZEV Mandates — CALIBRATE: Finally, we can’t ignore the existential threat to our industry: the California Air Resources Board’s (CARB) Advanced Clean Cars II (ACC 2) mandate that requires 100% Zero Emission Vehicle (ZEV) sales by 2035. I’m sure many of you are hearing from your OEMs about this, and we know it’s going to be a challenge. We’ve launched a Public Affairs campaign to push back against this aggressive regulation called CALIBRATE. CNCDA is fully engaged in this fight and we are prepared to educate Californians about the perilous consequences of this mandate. Please visit www.calibrateca.org for all the details and to help spread the word. Looking ahead, we’ll continue to focus on completing these strategic priorities. 2025 will be a critical year for CNCDA, and with your continued participation and support, I’m confident we’ll accomplish our goals. When we accomplish the last of these goals, we’ll be able to regroup again for another Strategic Planning Retreat and set the course for the future of our association. Thank you for your ongoing commitment and support, Brian Maas, President California New Car Dealers Association TOP PRIORITY TOP PRIORITY COMPLETED COMPLETED 7 California New Car Dealer Quarterly

2025 Officers and Directors EXECUTIVE COMMITTEE ROBB HERNANDEZ Chairman Camino Real Chevrolet JESSIE DOSANJH Vice Chairman Stevens Creek Chevrolet DEVINDER SINGH BAINS Secretary/Treasurer Turlock Chrysler Dodge Jeep Ram DAVID SIMPSON Immediate Past Chairman Simpson Buick GMC Cadillac of Buena Park, Simpson Chevrolet of Garden Grove, Simpson Chevrolet of Irvine RICK NIELLO Region 1 Vice President The Niello Company MARK NORMANDIN Region 2 Vice President Normandin Chrysler Dodge Jeep Ram TED NICHOLAS Region 3 Vice President Three-Way Chevrolet Cadillac JOHN OH Region 4 Vice President Lexus of Westminster RINALDI HALIM Region 5 Vice President Sierra Automotive Group 8 California New Car Dealer Quarterly

Randy Denham SJ Denham Inc. Matthew Hall AutoNation Western Region Taz Harvey Dublin Mazda Rick Niello The Niello Company Tony Toohey Auburn Toyota Jessie Dosanjh Stevens Creek Chevrolet Ryan Fitzpatrick Coliseum Lexus of Oakland Dave Moeller City Toyota Mark Normandin Normandin Chrysler Jeep Dodge Ram Devinder Singh Bains Turlock Chrysler Dodge Jeep Ram Cheryl Bedford Sunset Auto Center Don Groppetti Nissan of Visalia Bill Hatfield Hatfield Buick GMC Ted Nicholas Three-Way Chevrolet Cadillac Ellena WoodhamsSweet Fresno Acura James Graham Santa Margarita Ford Bruce Hamlin Guaranty Chevrolet Motors Inc. Jared Hardin Hardin Buick GMC John Oh Lexus of Westminster David Simpson Simpson Buick GMC Cadillac of Buena Park Anne Boland Bob Smith BMW Tom George Thorson Motor Center Sal Gonzalez Culver City Volvo Rinaldi Halim Sierra Automotive Group Robb Hernandez Camino Real Chevrolet DIRECTORS REGION 1 REGION 2 REGION 3 REGION 4 REGION 5 9 California New Car Dealer Quarterly

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2025 CNCDA Welcome Reception at NADA Show JANUARY 24, 2025 LE MÉRIDIEN, NEW ORLEANS We want to sincerely thank our dealers, sponsors and association friends who were able to navigate flights and the rough weather leading up to the 2025 NADA Show in New Orleans. We appreciate everyone who attended CNCDA’s Welcome Reception, and we can’t wait to see you all next year in Las Vegas! 12 California New Car Dealer Quarterly

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MANNING LEAVER LEGAL LANE The Importance of Shareholder Agreements Shareholder agreements play a key and often crucial role in governing relationships among shareholders of a corporation and can be a very effective means to protect shareholders, including with respect to transfer of shares, voting rights and decision making. Shareholder agreements also provide a way to supplement or vary the default rules set forth in applicable law. Thus, a well-thought-out shareholder agreement can address many issues that may arise in the future, helping to prevent disputes and avoid costly litigation. This article highlights some of these important issues, and while it pertains to shareholder agreements, many of the same considerations are equally applicable to operating agreements of limited liability companies. Restrictions on Transfer of Stock By default, and subject to compliance with securities laws, generally stock of corporations may be freely transferred. By Wade Kackstetter, Partner, Manning, Leaver, Bruder & Berberich LLP 18 California New Car Dealer Quarterly

However, particularly in small, closely held corporations with only a limited number of shareholders, the existing shareholders may desire to restrict who may become a shareholder of the corporation to limit the shareholders to persons known to the existing shareholders. There are a variety of ways a shareholder agreement can restrict the transfer of stock, including (i) prohibiting the transfer of stock without the consent of the other shareholders, (ii) providing other shareholders with a right of first offer or a right of first refusal if a shareholder desires to sell or transfer his or her stock, and (iii) prohibiting shareholders from encumbering their stock, such as by prohibiting a pledge of stock as collateral for a loan. When such restrictions on transfer are in place, there are often specified exceptions that would not require the consent of other shareholders or trigger rights of first offer or first refusal, such as transfers to a shareholder’s family trust or to other existing shareholders. Buy-Sell Provisions Shareholder agreements often contain put and call rights and may address the sale of stock upon the death, disability or termination of employment of a shareholder. For example, a minority shareholder may be granted a put right, namely the option to require other shareholders or the corporation to purchase the minority shareholder’s stock at a set price or pursuant to a specified formula, thus giving the minority shareholder a way to exit the corporation. Conversely, a shareholder or the corporation may be granted a call option, giving them the right to purchase the stock of a shareholder at a set price or pursuant to a specified formula. The right to exercise a call option is often triggered by a default by the selling shareholder under the shareholder agreement or another agreement or, if the selling shareholder is an employee of the corporation, by the termination of employment. Similarly, put or call rights may be granted to the corporation or shareholders with the trigger being the death or disability of a shareholder. Such rights may allow a disabled shareholder or the estate of a deceased shareholder to sell the stock so that liquid funds are available, allow the other shareholders or the corporation to prevent heirs or devisees of the deceased shareholder from becoming a shareholder, or allow removal of a shareholder that can no longer contribute to the business of the corporation. Drag-Along and Tag-Along Shareholder agreements can address issues that may arise if the corporation is to be sold through a stock sale. For example, if a majority of shareholders (usually a supermajority) agree to sell their stock as part of a stock sale of the corporation, drag-along rights allow them to force the remaining shareholders to sell their stock on the same terms. This protects the majority by preventing a minority holdout from stopping a stock sale of the corporation. As a protection to minority shareholders, a minority shareholder may be given the right to tag-along with the sale of stock by a majority of shareholders on the same terms. This protects the minority by not allowing the majority to sell their stock at a premium, potentially leaving minority shareholders behind or requiring them to sell at a lower price if they want to sell. 19 California New Car Dealer Quarterly

Protection of Minority Shareholders Shareholder agreements can help safeguard minority shareholders’ rights and interests, such as by including provisions that prevent majority shareholders from making decisions that disproportionately benefit the majority shareholders at the expense of minority shareholders. In close corporations, this is especially important as the risk of majority shareholders exploiting their position is higher. As discussed in the following list, some topics a shareholder agreement may cover in this regard are preemptive rights, the right to appoint a director, dividend policies, supermajority approval requirements for certain matters and tag-along rights. • Preemptive Rights: To protect shareholders against dilution of their holdings in the corporation, a shareholder agreement may grant the corporation’s shareholders the right to have the first opportunity to purchase shares in the corporation’s future stock issuances. • Board of Directors: Bylaws typically specify the number of directors a corporation may have, and a shareholder agreement could specify who will serve on the board or give certain shareholders the right to designate a director. For example, sometimes a minority shareholder who does not hold enough shares to select a director by vote may be given a right to designate a director. A shareholder agreement may also specify when such a shareholder would lose the right, such as if their ownership percentage falls below a certain threshold. • Dividends: A dividend policy setting forth, among other things, when and under what circumstances dividends must be paid, can be included in a shareholder agreement to give minority shareholders some certainty as to payment of dividends. • Super Majority Approval: A shareholder agreement could require a super majority vote for approval of certain actions or transactions. For example, a shareholder agreement could require super majority approval, such as a two-thirds vote, for the sale of the corporation’s stock or all or substantially all of the assets of the corporation, for the issuance of additional stock, or to take specified actions outside of the scope of the corporation’s normal day-to-day operations. • Tag-Along Rights: Tag-along rights are another means of protecting minority shareholders, and this is discussed under the Drag-Along and Tag-Along heading of this article. Confidentiality If there is a need for shareholders to keep certain information confidential, such as trade secrets and proprietary business information, including customer lists, a shareholder agreement can set forth the confidentiality obligations of shareholders. Non-Compete and Non-Solicitation State and federal laws often limit or restrict non-competition and non-solicitation provisions. However, even where such laws exist, there may be exceptions allowing a non-compete provision in connection with the sale of a business, including the sale of stock of a corporation, or restricting solicitation that would use the corporation’s intellectual property. When admitting a new shareholder to a corporation, whether such provisions are appropriate or permitted should be considered and could be included in a shareholder agreement to the extent allowed. Deadlock Particularly if there are two 50% shareholders or another combination of shareholders where there is a possibility of a deadlock due to a 50-50 vote, the shareholder agreement may contain a provision on how such a dispute would be resolved. Common approaches to deal with deadlock include designating a third party to cast a tie-breaking vote outside of legal process, requiring arbitration or allowing one shareholder to buy out another shareholder. Delegation of Management Rights; Simplified Corporate Procedures When permitted, a shareholder agreement may transfer the powers of the board of directors to shareholders so that they can manage a corporation directly, and it may, in other ways, simplify corporate procedures by removing formalities such as requirements to hold director and shareholder meetings. For example, a California close corporation, meaning a California corporation whose articles of incorporation include a provision that all of the corporation’s issued stock may not be held by more than 35 shareholders and the statement “This corporation is a close corporation,” may contain such provisions. In very small, closely held corporations where management practices are often informal, this can be an important part of a legal compliance strategy as the shareholder agreement can set forth corporate requirements that comport with how the corporation will actually be run. S-Corporations If a corporation is an S-corporation, a shareholder agreement can contain provisions to help ensure that S-corporation requirements stay satisfied. The previous issues are illustrative of important matters to consider when determining whether to enter into a shareholder agreement and what to include in it. However, there is no one-size-fits-all approach. Each jurisdiction has its own laws that may limit which and to what extent the foregoing issues can be addressed and when default statutory rules for corporations can be varied by a shareholder agreement. Moreover, whether certain minority or majority protections are appropriate for a particular group of shareholders will vary depending on the totality of the circumstances, and there are other issues that could be addressed in a shareholder agreement that are not discussed above. Accordingly, it is important to consult with 20 California New Car Dealer Quarterly

counsel familiar with the applicable state laws and the needs of the corporation and its shareholders to determine what should be included in a particular shareholder agreement. It is also advisable to have a tax and accounting advisor and estate planning counsel review the agreement for possible tax, accounting and estate planning issues. At times, a short-form shareholder agreement addressing only a very limited number of issues may be sufficient and appropriate, and in other circumstances, a long-form agreement addressing many potential issues would be the best approach. Particularly when admitting a new shareholder, it is very important to consider whether a shareholder agreement should be entered into. Even in existing corporations where there is no shareholder agreement, the shareholders may want to consider entering into a shareholder agreement to address future issues. If a shareholder agreement exists but was entered into many years ago or when different shareholders were in control of a corporation, it can be a worthwhile endeavor to carefully review it to see if the prior agreement is still a good fit for the shareholders. Manning, Leaver, Bruder & Berberich LLP is a Los Angeles law firm that practices throughout California and has been in existence for over 100 years. It has a strong automobile dealer practice covering all areas related to the automobile dealer industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, dealer association law, new motor vehicle board matters and franchise law. See manningleaver.com for more information and areas of practice. Nothing in this article may be considered as legal advice. Contact legal counsel for legal advice. Stay compliant. Protect your bottom line. We have a combined 95 years of experience helping automobile dealers comply with EPA, IIP and OSHA regulations. Let our experts show you a new approach for managing compliance at your dealership. (562) 704-4000 cellyservices.com Spend less time on compliance issues and more time running your dealership. LET’S TALK! 21 California New Car Dealer Quarterly

CNCDA’s Donation for SoCal Wildfire Victims In early February, the California New Car Dealers Association (CNCDA) announced a major donation to support those affected by the devastating wildfires in Southern California. CNCDA is donating $100,000 to the National Automobile Dealers Association (NADA) Foundation’s Emergency Relief Fund. This donation, unanimously approved by the CNCDA Board of Directors, will directly help dealership employees and their families who have been significantly impacted by this disaster. The wildfires have caused significant destruction across the region, forcing several dealerships to close their doors temporarily and, in some cases, devastating many employees’ homes. “We were deeply concerned to hear about the wildfires in Southern California. We’ve been in close communication with our dealer members and have extended our support for their employees who were most affected by this crisis, ensuring they are safe and cared for. CNCDA’s members remain committed to providing any assistance for their fellow dealers through the aftermath of this tragedy,” noted Brian Maas, CNCDA president. The NADA Emergency Relief Fund offers financial assistance to dealership employees impacted by disasters, with grants of up to $1,500 available to help those in need. “For years, the NADA Emergency Relief Fund has been there to help dealership employees and their families recover from natural disasters like hurricanes, wildfires, tornadoes and floods. Contributions like this one from CNCDA are only possible thanks to the generosity of dealers across the country. CNCDA’s significant donation is especially meaningful, given how hard Southern California has been hit by these fires. It truly shows how dedicated California dealers are to taking care of their own, especially during times of crisis,” added Mike Stanton, NADA president and CEO. CNCDA’s contribution reinforces our members’ commitment to supporting the communities in which they operate, especially in times of hardship. For more information on the NADA Foundation’s Emergency Relief Fund, scan the QR code. https:// www.nada.org/nada/emergency-relief-fund 22 California New Car Dealer Quarterly

CALIBRATE: A Smarter Approach to California’s ZEV Mandate Scan the QR code to learn more and join us! What is CALIBRATE? A coalition of businesses, consumer advocates, and industry leaders calling for a practical, balanced approach to California’s zero-emission vehicle (ZEV) mandate. . The Mandate: What’s Changing? California’s ACC 2 regulation requires: ◦ 35% of new car sales to be ZEVs by 2026, rising annually until new gas-powered car sales are banned in 2035. ◦ Automakers face $20,000 fines per noncompliant vehicle. The Consequences? ◦ Billions in lost tax revenue, threatening public services. ◦ 2.1M chargers needed by 2035—only 152K exist today. ◦ Higher prices, fewer choices, and more older, high-emission vehicles on the road. The Problem? EV Demand Isn’t Keeping Up. ◦ 2024 ZEV sales grew just 0.3%. ◦ No major automakers (except EV-exclusive manufacturers) are on track for 2026. The Smarter Approach: Pause and Calibrate. ◦ Pause ACC 2 enforcement until market conditions allow a smooth transition. ◦ Phase in targets to ensure affordability, reliable infrastructure, and sustainable progress. CalibrateCA.org/member

The CNCDA Foundation WE’RE NOT JUST FILLING JOBS The CNCDA Foundation has evolved, thanks to the leadership of our board of directors and industry advisors. We are growing young people’s interest in automotive careers in California through programs focused on four key pillars: 1. Fostering career awareness. 2. Supporting career choice. 3. Providing innovative career training. 4. Inspiring career growth. Through these initiatives, we are not just filling jobs — we are building interest in automotive careers and fostering a skilled workforce of tomorrow. The following are ways we are making a difference across California. Programs for Current Auto Students Automotive Technology Career Days High school automotive students engage directly with local college auto programs and industry leaders. These events offer hands-on experiences led by dealership employees and showcase the latest automotive technologies brought by our manufacturer sponsors. Students can also explore local employment opportunities through job fairs at the event. Internship Program College auto students can apply to be sponsored by a dealership where the student is paired with a mentor. They will work together during the eight-week program to build a relationship aimed at securing employment upon completion. This program will launch in Q2 of 2025. 24 California New Car Dealer Quarterly

Programs for 16-24 Young Adults Without Access to Auto Class Pre-Apprenticeship Program Designed for students and young adults without access to automotive classes in high school, this program prepares participants for careers as technicians. The curriculum covers essential topics such as safety, general automotive knowledge, and best practices, laying the groundwork for future apprenticeships and career success. Apprenticeship Program In partnership with the CNCDA Foundation and Automotive Apprenticeship Group (AAG), this comprehensive two-year program offers on-the-job training, combining recruitment, hiring, education and hands-on experience. Apprentices earn while they learn, gaining brand-specific skills and receiving a certificate from the U.S. Department of Labor. This initiative helps dealerships build a consistent pipeline of skilled technicians who are ready to meet the industry’s evolving needs. Programs Supporting Automotive Educators California Auto Educators Support Network Supporting automotive educators is critical to building a strong pipeline of future employees. This network aims to empower educators with the resources and support they need to thrive and address these challenges: 1. Closing the pay gap for automotive teachers as compared with their A-G colleagues. 2. Enhancing access to modern tools, technologies and resources in their classrooms. 3. Aligning California curriculum standards with current industry needs. 4. Developing a path to teaching for current technicians and continued education teachers who have been out of the industry for a number of years. Through these initiatives, we are not just filling jobs — we are building interest in automotive careers and fostering a skilled workforce of tomorrow. 25 California New Car Dealer Quarterly

Congratulations! 26 California New Car Dealer Quarterly

Compliance Obligations for Employers During Wildfires The recent Southern California wildfires have served as a stark reminder of the challenges businesses face when natural disasters strike. What’s most concerning is that it’s not even peak fire season yet. These fires resulted in widespread evacuation orders, smoke exposure, power outages and significant disruptions to work and daily life. As of Jan. 7, 2025, a State of Emergency was declared for Los Angeles and Ventura counties, underscoring the gravity of the situation. For employers, understanding compliance obligations during wildfires is critical. Whether or not your business was directly affected this time, these events provide a learning opportunity. Future wildfires could impact operations, employee safety and legal responsibilities. The following are key employment law considerations businesses must prepare for when facing wildfire-related disruptions. Employee Rights During Emergency Conditions California labor laws provide protections for employees during emergency conditions. Under Labor Code Section 1139, employers cannot discipline or retaliate against employees who: • Refuse to report to work or leave the workplace if they have a reasonable belief that the worksite is unsafe due to an emergency condition. • Use their mobile devices to seek emergency assistance, assess safety conditions or communicate with family members. An “emergency condition” includes: 1. A disaster or extreme peril to the safety of persons or property due to natural forces or criminal acts; or 2. A government-issued evacuation order affecting the workplace, an employee’s home or their child’s school. By Scali Rasmussen PC 27 California New Car Dealer Quarterly

Employers should review their workplace policies to ensure compliance and provide training to managers on these legal requirements. Pay Obligations for Business Closures or Evacuations If a business closes due to a wildfire or related hazards, employers need to consider pay obligations for both exempt and non-exempt employees. • Non-Exempt Employees: Generally, reporting time pay is required when an employee is sent home early. However, if a business closes due to a natural disaster or fire hazard, reporting time pay is not required. Employees must be paid for the actual hours worked but are not entitled to additional compensation for a canceled shift. • Exempt Employees: If an exempt employee works any portion of the day, they must receive their full salary for that day. However, deductions can be made for full-day absences if they choose to take unpaid time off or use available paid leave (such as vacation or PTO). Employers should have clear policies in place for emergency closures and communicate pay expectations to employees in advance. Employer Obligations Regarding Wildfire Smoke Exposure Smoke from wildfires can create hazardous working conditions even in areas far from the fire itself. Under Cal/OSHA’s wildfire smoke regulation, employers must take steps to protect workers when the Air Quality Index (AQI) for PM2.5 reaches hazardous levels. Employer Responsibilities When AQI is 151 or Higher: 1. Monitor air quality and communicate risks to employees. 2. Move employees to an indoor space with proper ventilation, if possible. 3. Provide N95 respirators for voluntary use when AQI is between 151 and 500. 4. Require the use of respirators when AQI exceeds 500. 5. Train employees on the health effects of wildfire smoke and how to protect themselves. Employers can reference the Cal/OSHA fact sheet on wildfire smoke for additional compliance guidance, available by scanning the QR code. https://www.dir.ca.gov/dosh/wildfire/Protecting-workersfrom-Wildfire-Smoke-fs.pdf New Hire Notice Requirements in Declared Emergencies California requires employers to provide non-exempt employees with a Labor Code §2810.5 notice outlining their wages, pay schedule and other key information. When a state of emergency is declared, employers must also notify new hires about the emergency declaration’s impact on health and safety. For businesses operating in Los Angeles or Ventura counties, any employee hired within 30 days of Jan. 7, 2025 (or future emergency declarations) must receive this updated notice with the emergency box checked. Failure to comply can lead to liability under the Private Attorneys General Act (PAGA). Preparing for the Future Wildfires in California are becoming increasingly unpredictable and severe. While some businesses were directly affected by the recent fires, all employers should take this as a wake-up call to prepare for future emergencies. Key steps include: • Reviewing emergency leave and pay policies to ensure compliance with California law. • Updating wildfire smoke protection plans and ensuring N95 masks are available. • Training managers and HR teams on employees’ rights during emergency conditions. • Communicating clear procedures for business closures, evacuations and employee safety. A quick check-in with legal counsel now can save a lot of stress and confusion when a natural disaster hits. The legal landscape around disaster-related employment obligations is always evolving, and staying ahead of potential issues can make all the difference. Taking proactive steps today — reviewing policies, updating compliance measures and ensuring your team knows their rights — can help protect your business and keep employees safe when the next wildfire or emergency arises. For employers, understanding compliance obligations during wildfires is critical. 28 California New Car Dealer Quarterly

California Auto Outlook Comprehensive Information on the California Vehicle Market Volume 21, Number 1 Released January, 2025 Covering Fourth Quarter 2024 TM Publication Sponsored By: California New Light Vehicle Registrations Predicted to Increase Slightly in 2025 TWO YEAR PERSPECTIVE Historical Data sourced from Experian Automotive. *2025 forecast by Auto Outlook. Historical figures have been updated since the previous release. California Annual New Light Vehicle Registrations - 2010 thru 2025 ANNUAL TRENDS QUARTERLY RESULTS California Quarterly New Light Vehicle Registrations Percent Change vs. Year Earlier Data sourced from Experian Automotive. 1HZ YHKLFOH UHJV PLOOLRQV <HDUV &DOLIRUQLD 8 6 &KDQJH &KDQJH 5HJLVWUDWLRQV TOTAL 1,764,767 1,759,141 -0.3% 14,981,634 15,497,633 3.4% Car 539,900 480,892 -10.9% 3,067,527 2,918,221 -4.9% Light Truck 1,224,867 1,278,249 4.4% 11,914,107 12,579,412 5.6% Domestic 639,434 588,110 -8.0% 6,465,537 6,476,432 0.2% European 261,882 261,353 -0.2% 1,520,750 1,591,127 4.6% Japanese 698,196 734,804 5.2% 5,385,197 5,771,132 7.2% Korean 165,255 174,874 5.8% 1,610,150 1,658,942 3.0% 0DUNHW 6KDUH Car 30.6 27.3 -3.3 20.5 18.8 -1.7 Light Truck 69.4 72.7 3.3 79.5 81.2 1.7 Domestic 36.2 33.4 -2.8 43.2 41.8 -1.4 European 14.8 14.9 0.1 10.2 10.3 0.1 Japanese 39.7 41.8 2.1 35.9 37.2 1.3 Korean 9.4 9.9 0.5 10.7 10.7 0.0 Data sourced from Experian Automotive. 4 YV 4 4 YV 4 4 YV 4 4 YV 4 4 YV 4 4 YV 4 FKDQJH YV \HDU HDUOLHU California and U.S New Light Vehicle Registrations 2023 and 2024 State new light vehicle registrations are predicted to reach 1.8 million units in 2025, an increase of 2.3 percent from 2024. Potential changes in policies during 2025 (i.e, tax cuts, increase in tariffs, and reductions in labor force due to deportations) introduce elevated uncertainty to the outlook for new vehicle sales. Collectively, these policy initiatives could add to inflation, reversing recent improvements in affordability. Despite these potential negatives, a strong labor market and pent-up demand accumulated during five years of below average sales should lead to improving sales in 2025. New light vehicle registrations in California declined a slim 0.3 percent from 2023 to 2024. The U.S. market improved by 3.4 percent last year. All of the decrease in the state market last year was attributable to Tesla, which had an 11.6 percent decline. Registrations for all other brands increased 1.4 percent. Light trucks gained market share in both the state and U.S. markets. New vehicle registrations in California increased 4.8 percent in the fourth quarter of 2024 versus year earlier. The market declined in the second and third quarters of last year. The market should be flat in the first quarter of this year, with a small increase possible. 30 California New Car Dealer Quarterly

California Auto Outlook Gasoline, 57.5% Electric (BEV), 22.0% Hybrid, 14.7% Plug In Hybrid (PHEV), 3.5% Diesel, 2.3% Fuel Cell, 0.0% Annual Registrations and Market Share Quarterly Registrations and Market Share 2020 2021 2022 2023 2024 4Q '23 1Q '24 2Q '24 3Q '24 4Q '24 ZEV registrations 93066 164592 262440 382670 387368 ZEV registrations 89745 89868 101338 101888 94274 ZEV share 5.8% 9.3% 16.6% 21.7% 22.0% ZEV share 21.3% 21.0% 22.0% 23.7% 21.3% Hybrid regs. (excl. plug ins) 97536 160076 144427 196283 259133 Hybrid regs. (excl. plug ins) 56211 56054 61781 64319 76979 Hybrid share (excl. plug ins) 6.1% 9.1% 9.1% 11.1% 14.7% Hybrid share (excl. plug ins) 13.3% 13.1% 13.4% 15.0% 17.4% PHEV regs. 29083 54280 42479 59506 60800 PHEV regs. 15064 15698 14936 14721 15445 PHEV share 1.8% 3.1% 2.7% 3.4% 3.5% PHEV share 3.6% 3.7% 3.2% 3.4% 3.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 Market Share ZEVs Hybrids (excl. plug ins) PHEVs 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1Q '23 2Q '23 3Q '23 4Q '23 1Q '24 2Q '24 3Q '24 4Q '24 Market Share ZEVs Hybrids (excl. plug ins) PHEVs Vehicle Powertrain Dashboard Annual Quarterly Data sourced from Experian Automotive. ZEVs are full battery electric vehicles and include fuel cell vehicles. PHEVs are plug in hybrids. Hybrid vehicle registrations and market share excludes mild hybrids. ZEV market share was 22.0% in 2024, up from 21.7% in 2023. Market Share for all Powertrain Types - 2024 California and U.S. Markets California ZEV market share 2024 22.0% ❏ Gasoline powered vehicles accounted for 57.5 percent of state new vehicle registrations last year. ❏ ICE market share (including gasoline and diesel vehicles) was 59.8 percent in 2024, down from 71.6 percent in 2022 and 88.4 percent in 2018. ❏ Combined share for BEVs, PHEVs, hybrids, and fuel cell vehicles was 40.2 percent last year, up from just 11.6 percent in 2018. Electric and Hybrid Vehicle Market Share U.S. ZEV market share 2024 8.0% California share of U.S. ZEV registrations 2024 31.1% Data sourced from Experian Automotive. Data sourced from Experian Automotive. BEVs are full battery electric vehicles. ZEV market share declined from 23.7% in Q3 ‘24 to 21.3% in Q4. 31 California New Car Dealer Quarterly

California Auto Outlook 20.7% 22.0% 22.7% 21.3% 21.0% 22.0% 23.7% 21.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 1Q '23 2Q '23 3Q '23 4Q '23 1Q '24 2Q '24 3Q '24 4Q '24 Vehicle Powertrain Dashboard Make and Model Registrations for ZEVs and PHEVs in California ZEVs are full battery electric vehicles (BEVs) and fuel cell vehicles. PHEVs are plug in hybrids. Data sourced from Experian Automotive. Top 25 Selling BEV and PHEV Models - 2024 ZEV Registrations as a % of Total Registrations in California ❏ The graph on the left shows new ZEV registrations in California as a percent of industry along with CARB ACC2 mandates for 2026, 2027, and 2028 model year vehicles. ❏ ZEVs accounted for 21.3 percent of industry registrations in the fourth quarter of 2024, significantly below the upcoming CARB ACC2 mandated level of 35 percent for 2026 model year vehicles. ❏ 4Q ‘24 BEV market share would need to increase by 13.7 share points to meet the CARB mandated level of 35 percent for 2026 model year vehicles, representing a 64 percent increase in BEV registrations. Data sourced from Experian Automotive. California New Zero Emission Vehicle Registrations by Make 2023 and 2024 Annual Totals Registrations Market Share (%) 2023 2024 % Change 2023 2024 Change TOTAL 382,670 387,368 1.2 Acura 0 1,118 0.0 0.3 0.3 Audi 8,250 10,161 23.2 2.2 2.6 0.4 BMW 14,465 18,664 29.0 3.8 4.8 1.0 Cadillac 1,319 5,235 296.9 0.3 1.4 1.1 Chevrolet 19,145 14,553 -24.0 5.0 3.8 -1.2 Ford 16,070 17,317 7.8 4.2 4.5 0.3 Genesis 1,534 1,759 14.7 0.4 0.5 0.1 GMC 228 2,725 1095.2 0.1 0.7 0.6 Honda 0 7,006 0.0 1.8 1.8 Hyundai 16,956 22,718 34.0 4.4 5.9 1.5 Jaguar 174 2,843 1533.9 0.0 0.7 0.7 Kia 8,008 13,943 74.1 2.1 3.6 1.5 Lexus 1,842 4,088 121.9 0.5 1.1 0.6 Mazda 87 8 -90.8 0.0 0.0 0.0 Mercedes 15,724 17,369 10.5 4.1 4.5 0.4 MINI 864 871 0.8 0.2 0.2 0.0 Nissan 4,627 5,865 26.8 1.2 1.5 0.3 Other 3,624 6,627 82.9 0.9 1.7 0.8 Polestar 3,122 1,957 -37.3 0.8 0.5 -0.3 Porsche 2,358 2,254 -4.4 0.6 0.6 0.0 Ram 0 4 0.0 0.0 0.0 Rivian 10,277 12,020 17.0 2.7 3.1 0.4 Subaru 2,009 2,632 31.0 0.5 0.7 0.2 Tesla 230,010 203,221 -11.6 60.1 52.5 -7.6 Toyota 6,720 5,953 -11.4 1.8 1.5 -0.3 Volkswagen 12,259 5,440 -55.6 3.2 1.4 -1.8 Volvo 2,998 1,017 -66.1 0.8 0.3 -0.5 CARB ACC2 mandate for 2026 model year vehicles: 35% Rank Model Type Regs. 1 Tesla Model Y BEV 128,923 2 Tesla Model 3 BEV 53,056 3 Hyundai Ioniq 5 BEV 16,879 4 Ford Mustang Mach-E BEV 10,874 5 Toyota RAV4 PHEV 9,474 6 Tesla Cybertruck BEV 9,019 7 Rivian R1S BEV 8,721 8 Tesla Model X BEV 8,585 9 BMW i4 BEV 8,396 10 Jeep Wrangler PHEV 7,978 11 Honda Prologue BEV 6,955 12 BMW iX BEV 6,027 13 Ford F-Series Lightning BEV 5,590 14 Kia EV6 BEV 5,564 15 Toyota bZ4X BEV 5,495 16 Volkswagen ID.4 BEV 5,396 17 Cadillac Lyriq BEV 5,235 18 Mercedes EQE SUV BEV 5,167 19 Kia EV9 BEV 4,924 20 Mercedes EQB BEV 4,841 21 Nissan Ariya BEV 4,638 22 Chevrolet Equinox BEV 4,448 23 Hyundai Ioniq 6 BEV 4,272 24 Lexus RZ BEV 4,088 25 Chevrolet Bolt BEV 4,032 CARB ACC2 mandate for 2027 model year vehicles: 43% CARB ACC2 mandate for 2028 model year vehicles: 51% The California Air Resources Board’s 2035 ZEV rule (also known as Advanced Clean Cars II) starts with the 2026 model year. The rule’s ZEV stringency requirement starts at 35% and increases steadily each year, culminating with 100% in 2035 32 California New Car Dealer Quarterly

Covering Fourth Quarter 2024 The table below shows the top five selling models in 2024 in 18 segments. In addition to unit registrations, it also shows each model’s market share in its respective segment. MODEL RANKINGS Tesla Model Y is Best-Selling Light Truck in California New Vehicle Market; Camry is Car Leader BEST SELLERS IN PRIMARY SEGMENTS Small Cars: Honda Civic Full Size Pickup: Chevrolet Silverado Mid-Size and Large Cars: Toyota Camry Compact SUV: Toyota RAV4 Near Luxury Cars: Tesla Model 3 2 Row Mid-Size SUV: Subaru Outback Comp./Mid Size Pickup: Toyota Tacoma Luxury Mid-Size SUV: Lexus RX Data sourced from Experian Automotive. Figures for Prius include Prius Prime. Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Honda Civic 53049 29.6 Toyota Camry 55027 42.7 Ford Mustang 5334 36.9 Tesla Model 3 53056 45.9 Toyota Corolla 38578 21.6 Honda Accord 33317 25.8 Dodge Challenger 2871 19.9 Lexus ES 10106 8.8 Kia K4/Forte 16836 9.4 Nissan Altima 9917 7.7 Toyota 86 2550 17.6 BMW i4 8396 7.3 Nissan Sentra 15752 8.8 Chevrolet Malibu 6697 5.2 Mazda MX5 1370 9.5 Mercedes C-Class 7560 6.5 Hyundai Elantra 13017 7.3 Hyundai Sonata 6108 4.7 Chevrolet Camaro 750 5.2 BMW 3-Series 6140 5.3 Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Tesla Model S 3638 8.5 Toyota Tacoma 29026 41.7 Chevrolet Silverado 37655 25.1 Toyota Sienna 9647 37.5 Porsche 911 3017 7.0 Ford Maverick 13922 20.0 Ford F-Series 36546 24.4 Honda Odyssey 7243 28.1 Chevrolet Corvette 2935 6.8 Chevrolet Colorado 6299 9.1 GMC Sierra 20291 13.5 Kia Carnival 4491 17.4 Mercedes E-Class 2856 6.6 Nissan Frontier 5923 8.5 Ram Pickup 18272 12.2 Chrysler Pacifica 3856 15.0 BMW i5 2815 6.6 GMC Canyon 3379 4.9 Toyota Tundra 16420 11.0 Chrysler Voyager 457 1.8 Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Ford Transit Connect 10130 39.8 Honda HR-V 21952 18.6 Toyota RAV4 65041 22.4 Subaru Outback 14060 17.7 Mercedes Sprinter 5986 23.5 Subaru Crosstrek 18348 15.5 Honda CR-V 49920 17.2 Ford Mustang Mach-E 10874 13.7 Ram Promaster 3941 15.5 Toyota Corolla Cross 13089 11.1 Hyundai Ioniq 5 16879 5.8 Toyota 4Runner 9119 11.5 Chevrolet Express 1703 6.7 Chevrolet Trax 10770 9.1 Hyundai Tucson 14068 4.8 Hyundai Santa Fe 9083 11.5 Ford E-Series 1579 6.2 Mazda CX-30 8338 7.1 Nissan Rogue 13877 4.8 Honda Prologue 6955 8.8 Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Honda Pilot 14743 13.5 Ford Bronco 8094 24.0 Mercedes EQB 4841 18.0 Tesla Model Y 128923 62.6 Ford Explorer 13348 12.2 Chevrolet Tahoe 6906 20.5 Audi Q3 4378 16.3 Lexus NX 15568 7.6 Toyota Highlander 9912 9.1 Chevrolet Suburban 3291 9.8 Audi Q4 E-Tron 3803 14.2 BMW X3 10722 5.2 Kia Sorento 8757 8.0 Toyota Land Cruiser 2821 8.4 Volvo XC40 3316 12.4 Mercedes GLC-Class 9527 4.6 Kia Telluride 8639 7.9 Ford Expedition 2664 7.9 BMW X1 3225 12.0 Audi Q5 8246 4.0 Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Lexus RX 17925 16.6 Rivian R1S 8721 24.0 Toyota Camry 55027 11.4 Tesla Model Y 128923 10.1 Mercedes GLE-Class 8881 8.2 Cadillac Escalade 3944 10.9 Tesla Model 3 53056 11.0 Toyota RAV4 65041 5.1 BMW X5 8702 8.1 Lexus TX 3902 10.8 Honda Civic 53049 11.0 Honda CR-V 49920 3.9 Tesla Model X 8587 8.0 Land Rover Range Rover 3897 10.7 Toyota Corolla 38578 8.0 Chevrolet Silverado 37655 2.9 BMW iX 6027 5.6 Mercedes GLS-Class 3711 10.2 Honda Accord 33317 6.9 Ford F-Series 36546 2.9 Luxury and High End Sports Cars Compact/Mid Size Pickup Full Size Pickup Mini Van Top Selling Models in Each Segment - New Retail Light Vehicle Registrations (2024 Annual Total) Small Cars Mid Size and Large Cars Sports/Pony Cars Near Luxury Cars Luxury Mid Size SUV Luxury Large SUV Top Selling Passenger Cars Top Selling Light Trucks Large Van Subcompact SUV Compact SUV 2 Row Mid Size SUV 3 Row Mid Size SUV Large SUV Luxury Subcompact SUV Luxury Compact SUV 33 California New Car Dealer Quarterly

California Auto Outlook 1.3% 3.8% 2.7% 4.2% 2.2% 2.3% 2.0% 5.5% 5.3% 5.0% 10.9% 11.8% 8.1% 3.9% 12.8% 1.9% 2.1% 2.3% 3.4% 3.6% 3.7% 3.9% 3.9% 4.5% 4.8% 6.2% 7.4% 10.9% 11.6% 16.4% 0.0% 6.0% 12.0% 18.0% Audi GMC Mazda Subaru Lexus BMW Mercedes Nissan Hyundai Kia Chevrolet Ford Honda Tesla Toyota Market Share State U.S. BRAND SUMMARY Registrations Increased by More Than 20 Percent for Four Brands; Toyota is Market Leader Registrations increased by more than 11 percent for Lincoln, Land Rover, Cadillac, Buick, Rivian, Lexus, and Honda. California and U.S. Market Share - 2024 (Top 15 selling brands in CA) Percent Change in Brand Registrations 2024 vs. 2023 (Top 30 selling brands in CA) Data sourced from Experian Automotive. Toyota, Tesla, Honda, Ford, and Chevrolet were market share leaders in California. -32.1% -28.6% -22.6% -21.5% -13.2% -11.6% -9.8% -9.2% -8.4% -6.5% -3.9% -3.9% 0.8% 1.3% 2.1% 2.4% 3.9% 4.4% 6.9% 7.9% 8.0% 8.0% 9.6% 11.5% 12.1% 17.0% 21.7% 21.7% 22.0% 27.6% Chrysler Jeep Infiniti Ram Audi Tesla Acura Volkswagen Chevrolet Subaru Ford Genesis Mercedes Porsche Kia BMW Nissan Toyota Dodge Mazda Hyundai GMC Volvo Honda Lexus Rivian Buick Cadillac Land Rover Lincoln 34 California New Car Dealer Quarterly

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