DriveTime Automotive Group, Inc.
Bridgecrest Acceptance Corporation, and
SilverRock Automotive, Inc.
Climate-Related Financial Risk Disclosure

Executive Summary

DriveTime Automotive Group, Inc. and Bridgecrest Acceptance Corporation and their subsidiaries and affiliates (the "Company") submits this climate-related financial risk disclosure in accordance with California Senate Bill 261 (SB 261).¹ This report is structured using the Task Force on Climate-related Financial Disclosures (TCFD) framework and outlines the Company's governance, strategy, risk management, and preliminary metrics related to climate-related financial risks which is based on 2025 data.

While, at this time, this disclosure does not include greenhouse gas (GHG) emissions data, the Company has retained an independent third-party consulting agency to assist in quantifying Scope 1, Scope 2, and Scope 3 emissions in conformity with California Senate Bill 253 (SB 253).² This engagement represents a significant and costly first step toward comprehensive climate transparency and will inform future disclosures under both SB 253 and SB 261.

1. Governance

Board Oversight

The Company’s Board of Directors oversees all corporate governance matters, including climate-related financial risks. The Board meets quarterly. As necessary and appropriate, climate issues are reviewed, with emphasis on regulatory developments, potential portfolio exposure to emissions-intensive assets, and transition and other risks associated with the increased use of electric vehicles (EVs) over internal combustion engine (ICE) vehicles.

Management Oversight

Climate risk is managed by the General Counsel and Chief Compliance Officer with support from the Company's compliance and legal teams. These teams monitor climate-related regulatory obligations, assess portfolio vulnerabilities, and report findings to executive leadership. Where appropriate, climate risk responsibilities are embedded in compliance workflows. Cross-functional collaboration continues to assess and integrate climate considerations into underwriting, asset valuation, and facility planning, where and when appropriate.

2. Strategy

The Company sees potential opportunities and market affordability shifts, which may or may not reduce environmental impacts, through financing the purchase of EVs.

Residual value risk is impactful to the Company's business models due to longer financing terms and its customer base. The Company continues to monitor and assess whether ICE vehicles may potentially depreciate more rapidly under tightening emissions regulations and shifting consumer preferences, which would impact the Company's underwriting.

Identified Risks and Opportunities

• Short-Term (1–3 years): Compliance costs related to SB 261 and SB 253; reputational risk; increased regulatory scrutiny of ICE vehicle financing; and continued assessment of vehicle affordability and availability for consumers.
• Medium-Term (3–10 years): Transition risk from adoption of EV; residual value volatility; credit risk tied to emissions-linked assets.
• Long-Term (10+ years): Physical risks to asset recovery operations (e.g., flooding, extreme heat); systemic risk from climate-driven economic shifts.

Geographic Risk Context

The Company's operational footprint includes a significant presence in Sun Belt states where climate hazards such as extreme heat, drought, flooding, windstorms, and wildfires are intensifying. Mitigation planning includes evaluating potential facility relocation, enhancing HVAC resilience, and adjusting logistics associated with the acquisition and reconditioning of vehicles, and the transport of the same to dealerships for sale to end consumers.

Scenario Analysis

The Company conducted a qualitative scenario analysis using pathways developed by the Network for Greening the Financial System (NGFS):³

• Orderly Transition (2°C): Moderate regulatory costs; manageable portfolio shifts.
• Disorderly Transition (>2°C): Elevated credit risk; stranded assets; increased compliance burden.
• Hot House World (>4°C): Physical risk dominates; operational disruptions; insurance cost escalation.

3. Risk Management

Identification and Assessment

The Company identifies climate-related risks through:

• Regulatory horizon developments both at the state and federal level, e.g. California and the U.S. Securities and Exchange Commission.
• Portfolio exposure analysis using sectoral and geographic indicators.
• Updates to internal risk taxonomy to include climate risk categories.

Key Risk Indicators (KRIs)

The Company will monitor the following key performance indicators to assess climate-related financial risk:

• Volatility in gasoline and energy prices.
• Frequency and severity of extreme heat, drought, flooding, windstorms, and wildfires.
• Regulatory scrutiny related to ICE vehicle financing.
• EV adoption rates in subprime segments.
• Insurance cost trends in high-risk geographies.

Risk Management Actions

If any KRIs escalate to material levels, the Company may take actions including:

• Accelerating EV financing programs.
• Adjusting facility siting criteria to avoid high-risk geographic locations.
• Revising underwriting standards to reflect climate exposure and risk.
• Enhancing business continuity planning for climate disruptions.

Integration into Enterprise Risk Management

Climate risk is an evolving topic that is integrated into the Company's risk mitigation framework. Material risks will be escalated to the executive team and Board of Directors. Climate risk will be treated as any other issue impacting multiple areas, including credit, operations, and reputational risk.

4. Metrics and Targets

GHG Emissions Disclosure

The Company has retained an independent third-party consulting agency to quantify Scope 1 and Scope 2 emissions for 2025 data. Scope 3 emissions measurement will follow in subsequent phases. This foundational investment supports compliance with SB 253 and informs future disclosures under SB 261.

Target-Setting Process

In lieu of finalized targets, the Company is undertaking the following steps in 2025:

• Establishing baseline data on EV and ICE originations.
• Benchmarking peer practices and regulatory expectations.
• Analyzing regional variation in EV adoption and affordability.
• Evaluating residual value trends and credit performance by vehicle type.

Key considerations include the subprime nature of our customers' credit profiles, affordability constraints, and geographic differences in EV infrastructure. As and where appropriate, the Company anticipates further exploring additional climate-related metrics in 2026-27, with potential inclusion in the next disclosure cycle.

Preliminary Climate-Related Metrics

• Percentage of ICE versus EV in financed portfolio.
• Credit exposure to carbon-intensive assets.
• Geographic exposure to physical climate risks.

Conclusion

The Company understands this disclosure satisfies the requirements of California SB 261 by providing a structured, TCFD-aligned overview of the Company's climate-related financial risks. It reflects the Company's commitment to transparency, culture of regulatory compliance, and strategic planning in the face of climate change. The engagement of a consulting agency for GHG emissions quantification under SB 253 further demonstrates the Company's proactive and good faith approach to climate risk management.

Footnotes

1. CAL. HEALTH & SAFETY CODE § 38532.5.

2. CAL. HEALTH & SAFETY CODE § 38532.

3. The NGFS is a global consortium of central banks and supervisors that provides climate scenario pathways used in financial risk modeling and disclosure.