AutoCanada : Q1 2024 MD&A

First Quarter

Management Discussion & Analysis

autocan.ca

2024

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the three-month period ended March 31, 2024

2. EXECUTIVE SUMMARY Business Overview

Canadian Operations

AutoCanada's Canadian Operations segment currently operates 66 franchised dealerships in Canada, comprised of 25 brands, in 8 provinces. AutoCanada currently sells Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen branded vehicles. In addition, AutoCanada's Canadian Operations segment currently operates 3 used vehicle dealerships and 1 used vehicle auction business supporting the Used Digital Division, 13 RightRide division locations, and 11 stand-alone collision centres within our group of 27 collision centres ("Collision Centres"). In 2023, our Canadian dealerships sold approximately 89,600 new and used retail vehicles. In addition, our Collision Centres offer an opportunity for the Company to retain customers at every touchpoint within the automotive ecosystem.

AutoCanada's U.S. Operations segment, operating as Leader Automotive Group ("Leader"), currently operates 18 franchised dealerships comprised of 16 brands, in Illinois, USA. Leader currently sells Audi, Chevrolet, Chrysler, Dodge, Honda, Hyundai, Jeep, Kia, Lincoln, Mercedes-Benz, Porsche, Ram, Subaru, Toyota, Volkswagen, and Volvo branded vehicles. In 2023, our U.S. dealerships sold approximately 13,800 new and used retail vehicles.

Seasonality

The Company's results from operations for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full fiscal year due to seasonal variations in sales levels. The Company's operating results and financial performance have historically been lower in the first and fourth quarters than during the second and third quarters of each year. The timing of acquisitions and divestitures may also cause substantial fluctuations in operating results from quarter to quarter.

AutoCanada • 2024 First Quarter Report • Page 2

2024 First Quarter Key Highlights and Recent Developments

All comparisons presented below are between the three-month periods ended March 31, 2024 and March 31, 2023, unless otherwise indicated.

AutoCanada Key Highlights

• Revenue was $1,420.9 million as compared to $1,539.3 million in the prior year, a decrease of (7.7)%
• Net (loss) income for the period was $(2.4) million as compared to $8.4 million in the prior year, a decrease of (128.2)%
• Diluted earnings (loss) per share was $(0.10) as compared to $0.32 in the prior year
• Adjusted EBITDA1 was $22.0 million versus $45.0 million in the prior year, a decrease of $(23.0) million

FIRST QUARTER RESULTS

Consolidated revenue decreased due to lower used retail vehicle sales, and lower F&I revenues, partially offset by higher new vehicle sales, positive contributions from collision operations and recent acquisitions.

Consolidated gross profit decreased primarily due to lower used retail vehicle sales and lower contributions from F&I.

Normalized operating expenses before depreciation, which excludes share-based compensation, transaction costs, and other non-recurring costs, declined due to lower employee costs. Normalized operating expenses before depreciation as a percentage of gross profit increased due to compressed gross profit.

Floorplan financing expenses increased as a result of higher interest rates and rising new inventory levels partially offset by lower used vehicle inventory levels.

Net loss for the period resulted from lower gross profits for the reasons stated above, an impairment charge in the current quarter for an asset held for sale, and higher floorplan financing expenses, partially offset by gains from the sale of two properties completed during the quarter.

Adjusted EBITDA for the period and adjusted EBITDA margin decreased primarily as a result of lower gross profits combined with higher floorplan financing expenses.

• See Section 13 Non-GAAP and Other Financial Measures for further information regarding the composition of these Non-GAAP Measures.

AutoCanada • 2024 First Quarter Report • Page 3

Canadian Operations Highlights

Revenue and gross profit decreased as a result of lower used vehicle sales and F&I operations, partially offset by contributions from collision operations, new vehicle sales and recent acquisitions. Growth in collision gross profit was driven by strong customer demand, increased production capacity and acquisitions. Used vehicle gross profit per retail unit increased due to a larger inventory writedown provision recognized in the prior year. F&I gross profit per retail unit average decreased as a growing proportion of retail vehicle sales are being purchased without dealer financing, resulting in fewer opportunities to sell higher margin warranty and insurance products.

Adjusted EBITDA declined due to the reasons stated above combined with higher floorplan financing expenses.

Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments for acquisitions included in the Q1 2024 results.

Same Store Metrics - Canadian Operations Highlights

Same store metrics include operations that have been owned for at least one full year since acquisition. As there have been no acquisitions or divestitures in the U.S. Operations in the past 13 months, U.S. Operations are all same store. Therefore, the table below discloses same store metrics on a Canadian Operations basis only.

For Canadian Operations, same store results make up 96.5% of revenue and 97.1% of gross profit in the current quarter. Refer to Section 17 Same Store Results Data for further information.

Revenue and gross profit decreased primarily as a result of reduction in both used retail vehicles sold and average selling price per used vehicle2, partially offset by collision operations. The reduction in used retail vehicles sales volume reflects more new vehicle product availability with the normalization of new vehicle inventory. The lower average selling price per used vehicle reflects consumers preference for lower priced vehicles in the current high

• See Section 13 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary financial measure.

AutoCanada • 2024 First Quarter Report • Page 4

interest rate environment.

New vehicle gross profit per retail unit declined reflecting higher sales of lower priced vehicles compared to last year. Used vehicle gross profit per retail unit increased reflecting a larger used vehicle inventory writedown provision recorded in the prior year, a lower average selling price per used vehicle, and the continued market pressure on used vehicle margins. The increase in collision gross profit resulted from strong demand and acquisitions. The decrease in F&I gross profit per retail unit average reflects lower retail sales volumes and higher non-dealer financed transactions.

U.S. Operations Highlights

Revenue and gross profit declined due to lower used retail vehicle sales and lower F&I performance, partially offset by contributions from P&S operations and new retail vehicle sales. Used vehicle performance was negatively impacted by market dynamics that made sourcing optimal used vehicle inventory more challenging. P&S gross profit increased due to the successful implementation of various initiatives to improve operational effectiveness.

Adjusted EBITDA declined due to lower used vehicle gross profits and higher floorplan financing costs, partially offset by higher P&S gross profit.

Collision Centre Operations Highlights

Collision revenue, gross profit, and gross profit percentage increased reflecting contributions from acquisitions and strong customer demand supported by increased Original Equipment Manufacturers ("OEM") certifications and insurance referrals.

Same store revenue, gross profit, and gross profit percentage increased for the reasons noted.

Adjusted EBITDA increased for the reasons noted above.

AutoCanada • 2024 First Quarter Report • Page 5

Other Recent Developments

During the quarter:

• On February 1, 2024, the Company entered into a $75.0 million interest rate swap with a fixed one-month Canadian Dollar Offered Rate ("CDOR") of 3.77%. The swap has an initial settlement date of February 1, 2027 and may be extended by the counterparty to February 1, 2029.
• On February 1, 2024, the Company completed the previously announced sale of two properties located in British Columbia and Alberta for cash consideration of $41.4 million plus customary closing adjustments. Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments for additional information.
• On March 1, 2024, the newly built open point dealership, Maple Ridge GM, located in Maple Ridge, B.C., commenced operations. The dealership consists of a dealership and service facility with 14 service bays and is the Company's first GM dealership in the Metro Vancouver area.
• On March 7, 2024, the Company announced that it had received approval from the Toronto Stock Exchange ("TSX") for the renewal of its normal course issuer bid ("NCIB"). Pursuant to the NCIB, AutoCanada may purchase up to 1,329,106 common shares during the twelve-month period commencing March 11, 2024 and ending March 10, 2025 or such earlier date as the Company may complete its purchases under the NCIB. For the period ended March 31, 2024, the Company has repurchased and cancelled 78,688 common shares for an average price of $24.67 and total cash consideration of approximately $1.9 million.
• On March 27, 2024, in connection with its previously announced NCIB, AutoCanada received approval from the TSX to implement an automatic share purchase plan ("ASPP") with its designated broker. The ASPP will terminate on March 10, 2025, unless terminated earlier in accordance with its terms.

After the quarter:

• For the period from April 1, 2024 to May 1, 2024, under the NCIB and ASPP, the Company has repurchased and cancelled 78,000 common shares for an average price of $24.53 and total cash consideration of approximately $1.9 million.
• On April 22, 2024, the Company entered into the fourth amended and restated credit agreement ("New Credit Facility") with the existing lending syndicate. The New Credit Facility includes the following:
• • Extend the maturity date to April 22, 2027 to maintain a three-year term;
  • Creation of a new $25 million capital expenditure term facility, and a corresponding $25 million accordion facility, to support the anticipated leasehold spending in the coming quarters;
  • Total aggregate bank facilities increased from $1.610 billion to $1.635 billion, with no changes to the revolving, wholesale flooring, and wholesale leasing facilities;
  • Enhancements to the Company's ability to floor a higher proportion of used vehicles;
  • Transition from CDOR to Canadian Overnight Repo Rate Average ("CORRA"); and
  • Certain administrative changes.
• On May 1, 2024, the Company completed the sale of specific land and building in Alberta for cash consideration of $10.0 million plus closing adjustments resulting in a gain of $3.4 million. The land and buildings were presented as held for sale in the Interim Financial Statements.

AutoCanada • 2024 First Quarter Report • Page 6

3. MARKET AND OUTLOOK

New light vehicle inventory is replenishing in North America following the supply shortages that occurred during the pandemic. According to Wards Intelligence, seasonally adjusted new light vehicle inventory in the U.S. has increased in 23 of the last 24 months, with inventory replenishment in Canada lagging the U.S. by approximately six to nine months.

In Canada, DesRosiers Automotive Consultants is currently forecasting 2024 new vehicle sales of approximately 1.8 million units, compared to 1.7 million units in 2023. Increases in new light vehicle inventory combined with a higher cost of borrowing, which creates consumer desire to minimize vehicle acquisition financing, is resulting in normalizing total gross profit per new retail unit. This trend has been established over the past year in the U.S., where inventory replenishment is more advanced, and is also playing out in Canada. Additionally, pandemic era new light vehicle supply shortages interrupted the normal course development of affordable, quality used vehicles. This has created a challenge in sourcing sufficient used vehicle inventory that is aligned with consumer preferences.

Against the backdrop of challenging market conditions, AutoCanada remains focused on its strategies to outperform the broader market while protecting profitability. Improving used vehicle acquisition to optimize unit profitability, careful new and used inventory management, along with a committed focus on cost savings and efficiency opportunities remain key priorities. Furthermore, the Company is focused on the commercial launch of the Kijiji F&I and Instant Cash Offer ("ICO") initiatives, which are slated to occur in the third and fourth quarter of 2024, respectively.

In August 2023, Project Elevate was launched across the organization. It is a five-year business plan that is focused on three priorities:

1. Maximizing gross profit;
2. Optimizing cost structure; and
3. Modernizing corporate infrastructure.

In January 2024, management initiated a restructuring plan at its U.S. Operations, including the implementation of its Canadian operating standards in its U.S. business. This included new and used vehicle sales practices, new and used inventory procurement and management, F&I certification and training, and P&S and collision best practices. These changes are expected to bring the U.S. segment to sustainable profitability by the end of 2024.

Management also made progress on execution of Project Elevate initiatives in its Canadian Operations during the first quarter of 2024. Projects to modernize corporate infrastructure in support of achieving efficiencies are underway in Finance, HR, and Information Technology, and best practices playbooks have been implemented across several functions. Management has developed new standard operating expense targets by brand, which will be implemented across its Canadian Operations, by the end of June 2024. These initiatives are foundational to our five- year objective to close the gap to normalized peer profitability.

Despite a challenging macro environment, AutoCanada remains dedicated to the execution of our five-year Project Elevate plan, which is the pathway to a more profitable and lower cost business in the future. We also remain diligent and agile given our expectation that the challenging market conditions experienced during the first quarter of 2024 may remain in the near term. We continue to be opportunistic in our approach to capital allocation between share buybacks, acquisitions, and other growth initiatives, with the objective of maximizing shareholder returns over the long term.

AutoCanada • 2024 First Quarter Report • Page 7