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Inflation Reduction Act supports dealerships & fossil fueled “clean vehicles”
Today, the Senate passed the Inflation Reduction Act which seems like a good thing for EVs and clean energy at first. However, a look at the bill itself takes us into a rabbit hole that smells of fossil fuels and dealership lobbying.
By changing the very definition of electric vehicles of clean vehicles, the Inflation Reduction Act is showing its support for fossil fuels. Let’s take a look at a thread shared by @WholeMarsBlog who took a deep dive into the Inflation Reduction Act.
How Dealerships benefit from the Inflation Reduction Act
As @WholeMarsBlog pointed out in his thread, the Inflation Reduction Act will allow dealerships to benefit from a subsidy. If a consumer purchases an EV from a dealership, they will be able to transfer that tax credit to a dealership.
This will be the only way they can benefit from that tax credit as direct-to-consumer doesn’t qualify.
This gives dealerships an edge over direct-to-consumer sales by allowing consumers to receive a lower monthly payment than ordering directly from a manufacturer such as Tesla or Rivian.
However, it doesn’t make sense to subsidize an industry that is known for dishonest tactics and treating American consumers badly.
Allowing fossil-fueled vehicles to be “clean vehicles”
A vehicle with an internal combustion engine and a small battery is now considered a “clean vehicle” by this bill. Plug-in hybrid EVs have been touted as a cleaner version of the ICE vehicle because it has a battery and can be charged.
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However, these are still fossil-fueled powered vehicles and discourage the sales of actual clean vehicles. As @WholeMarsBlog said, “Why buy an F-150 Lightning when an F-150 hybrid qualifies, too?” He also pointed out that hydrogen cars are also now subsidized.
Battery Minerals need to be sourced domestically
This is done in a very tricky way to make it look like the EV tax credit is being extended, but in reality fossil fuel powered hybrids will qualify while electric vehicles will not.
this is so wrong. if people don't plug in these cars they generate MORE emissions due to weight
— Whole Mars Catalog (@WholeMarsBlog) August 7, 2022
Rivian and Lucid along with other automakers will lose their $7,500 tax credit next year due to these battery sourcing requirements making it impossible for any full EV to qualify.
This is why it’s so important for automakers to partner with their domestic suppliers. Talon Metals’ Chief External Affairs Officer & Head of Climate Strategy, Todd Malan spoke with me at length on this topic and you read his thoughts here.
Benchmark Minerals’ take on the Inflation Reduction Act
Interesting commentary on the Inflation Reduction Act from @sdmoores https://t.co/Ma5fFElNjv pic.twitter.com/ePZMHVSX5a
— The Limiting Factor (@LimitingThe) August 7, 2022
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Benchmark Minerals published an article on what the Inflation Reduction act means for the EV battery supply chain and I think it’s important to consider some of the points they’ve made.
Simon Mores, CEO of Benchmark said that it’s almost impossible that any of the Fair Trade Alliance countries are able to fill China’s raw material gap for our EV demand between now and 2024.
“The presently proposed $7,500 credit for those EVs that do not contain any critical minerals from China or Russia will effectively be made redundant, considering the proposal ends in 2024 just when a domestic supply chain is beginning to gain momentum.”
“It is almost impossible that any Fair Trade Alliance countries – of which Australia and Chile are the stand out – could fill China’s raw material gap for the USA’s EV demand between now and 2024.”
“This is considering the basic lack of raw material supply in many markets and the fact that most future raw material has already been contracted and accounted for.”
“If the US wants the incentive to really work, it needs to extend this by 4 years to 2028 so the battery supply chain builds into the incentive.”
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With this thought in mind, @WholeMarsBlog pointed out that smaller batteries could meet the percentage requirements while larger batteries powering the entire vehicle can not. In other words, this opens the door for plug-in hybrid EVs to meet the rising demand for clean vehicles.
My 2.5¢
I think it’s important to note these flaws in the bill, but I also think that we do need a stronger U.S. battery supply chain. However, we shouldn’t sacrifice EVs for fossil fuels to get that stronger supply chain.
I’ve always thought that it was silly to include plug-in hybrid vehicles as a “clean vehciel” when they use both batteries and fossil fuels. Hybrids are great for those who want both options. I’ve also heard the arguments that they are more affordable than a Tesla, but it’s 2022 and if someone is in the market for a new car, there are options for a variety of EVs.
I think @WholeMarsBlog made an excellent point. I think Todd Malan made excellent points as well. At the end of the day, however, politricksters will politrick. The fact that they all agreed on this bill is, I think, kind of shocking.
Disclaimer: Johnna is long Tesla.
I’d love to hear from you! If you have any comments, concerns, or see a typo, you can email me at johnna@teslarati.com. You can also reach me on Twitter @JohnnaCrider1
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Elon Musk told The Economist that artificial intelligence will likely surpass the combined intelligence of every human on Earth within about five years, and that humans may not remain in charge once that happens. In a wide-ranging interview with editor-in-chief Zanny Minton Beddoes, recorded at Giga Texas for the outlet’s Insider series, Musk compared the widening gap between AI and human intelligence to the gap between humans and chimpanzees.
“It’s hard to imagine that the chimpanzee would be in charge,” he said, addressing what happens to human authority once AI moves far beyond us.
Elon Musk reiterates his most optimistic prediction yet with “UHI” forecast
Musk’s timeline stretches out from there. Five years for AI to out-think humanity combined, ten years before humans lose meaningful control, and by 2036, he says, money itself may stop mattering.
Musk notes that if robots and AI produce more goods and services than people could ever consume, currency loses its purpose. He told Beddoes that governments could respond with direct payments, what he called “universal high income,” a term he first used in an X post last August describing a future where “everyone will have the best medical care, food, home, transport and everything else.”
There will be universal high income (not merely basic income).
Everyone will have the best medical care, food, home, transport and everything else.
Sustainable abundance.
-— Elon Musk (@elonmusk) August 24, 2025
He also floated a more surprising prediction that deflation, and not inflation, would become the bigger economic problem, since expanding the supply of goods and services faster than the money supply grows would push prices down rather than up.
None of this is new territory for Musk, who has spent years describing an “age of abundance” built on Optimus and autonomous vehicles. What’s notable is the timing. The interview landed the same week Tesla shares dropped roughly 19 percent following a second quarter earnings report that beat on revenue but missed badly on profit, and as SpaceX stock continues to slide from its post-IPO peak.
Musk’s own net worth has fallen close to $700 billion since mid-June, according to the Bloomberg Billionaires Index, even as he describes a future where personal wealth stops being the point.
Musk did not dodge the risk side of the equation either. He put the odds of AI contributing to human extinction somewhere in the 10 to 20 percent range, then arrived at what he called his “philosophical conclusion” since the technology cannot realistically be stopped and the arguably better response is to keep building it and hope the outcome leans toward abundance rather than catastrophe. “I’ve gone from exhilaration to terror regarding AI,” he told Beddoes, “even intraday.”
Tesla is adding a new “Traction Control Modes” feature to its cars for better handling in any conditions. These features will roll out to the Model 3 and Model Y, the two vehicles in Tesla’s lineup that typically do not have drive modes for various conditions.
Tesla did include this in the Model S and Model X, as well as the Cybertruck.
The new feature will roll out with the 2026 Summer Update, which Tesla announced last week and subsequently started rolling out to some owners today. The Summer Update is the latest iteration of the usual four seasonal releases the company rolls out throughout the year. These releases typically feature some owner-requested features, as well as improvements to things like the Full Self-Driving suite.
Tesla reveals 2026 Summer Update with crazy fixes to Nav and more
This release is no different. Among the changes are improvements to Navigation, new customization options with wraps and how they can be shared and stored, more functionality with the Tesla smartphone app, and new gamification with self-driving.
However, Tesla announced today that it was adding another feature to the Summer Update. Traction Control Modes will now be available with the release
Tesla describes them:
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“Choose from three updated Traction Control Modes: Auto for normal driving conditions, Slippery Surface for icy or wet roads, Stuck Assist when stuck in snow, mud, or sand. The mode resets to Auto at the start of each drive. To select, go to Controls > Dynamics > Traction Control Mode.”
Tesla’s 2026 Summer Update also includes new Traction Control Modes
📸: @PatchesHQ https://t.co/N9cD2lGP14 pic.twitter.com/ogLC5ROIgc
— TESLARATI (@Teslarati) July 26, 2026
The use of these modes will help improve a Tesla’s overall performance in less-than-ideal conditions. Typically, these traction control modes monitor wheel speed through sensors and track engine power to adjust responsiveness in various conditions.
These drive modes are not an ultimate solution to all driving conditions; just because there is a “Stuck Assist,” doesn’t mean your Tesla will dig itself out of a foot-and-a-half trench during a blizzard. It is important to remember that some of these scenarios also require some assistance from the driver. For example, driving in sand requires tires to be aired down significantly to increase traction and control.
However, this will be a welcome addition for those who use the Full Self-Driving suite and might not be convinced of its performance in adverse conditions. Some of us prefer to be in control in rain, snow, or ice, which is totally understandable. However, adjusting the Traction Control Mode while utilizing FSD in snow, rain, or ice could increase confidence and overall experience.
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Tesla’s Summer Update is already rolling out to some owners, so it should be making its way to most of the fleet over the next several weeks. The Spring Update rolled out at a very conservative pace, so if you don’t have it by the end of August, don’t be too upset. It might just be Tesla’s method.
Just hours after Starship Flight 13 achieved a successful soft splashdown of its upper stage in the Indian Ocean on July 24, Elon Musk announced an ambitious next step for the company’s next launch of the rocket.
“Unless we discover problems after mission data review, SpaceX will attempt to catch the ship with the tower on [the] next flight,” the SpaceX CEO posted on X on Friday.
That “next flight” is expected to be Flight 14. The plan involves returning the Starship upper stage, commonly called the “ship,” to the Starbase launch tower in Texas and catching it mid-air using the same mechanical “chopsticks” arms that have already proven themselves with the Super Heavy booster.
Unless we discover problems after mission data review, SpaceX will attempt to catch the ship with the tower on next flight
— Elon Musk (@elonmusk) July 25, 2026
A successful catch would mark the first time an orbital-class upper stage has been recovered this way, advancing SpaceX’s goal of full and rapid reusability for the entire vehicle.
SpaceX has already demonstrated the tower-catch technique multiple times with Super Heavy. The first successful catch came on Flight 5 in October 2024, when Booster 12 was plucked from the sky by the Mechazilla arms. Subsequent flights, including those involving Boosters 14 and 15, repeated the feat. Several of those recovered boosters were later inspected, refurbished, and flown again, proving the system’s viability for quick turnaround.
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Traditional reusable rockets, such as SpaceX’s own Falcon 9 or Blue Origin’s New Shepard, land on legs either on land or droneships. Rocket Lab has recovered its small Electron first stages by helicopter, but those are far lighter vehicles.
SpaceX Starship just nailed something it’s never done before
The China Academy of Launch Vehicle Technology (CALT), a subsidiary of the China Aerospace Science and Technology Corp. (CASC), completed a catch of its booster on July 10. They are the only entity besides SpaceX to attempt and complete the feat.
Flight 13 provided encouraging data. The ship executed a controlled reentry, flipped, and soft-landed intact in the ocean after deploying Starlink satellites, offering the first clear post-splashdown views of an undamaged heat shield. The Super Heavy booster, meanwhile, experienced a harder splashdown in the Gulf of Mexico.
Musk has previously stressed that ship catches would only follow multiple successful soft ocean landings to minimize risk of debris over land.
If Flight 14 succeeds, SpaceX would take a major stride toward routine, rapid reuse of both stages—critical for lowering launch costs and supporting ambitious plans for lunar and Mars missions. For now, teams are reviewing the Flight 13 data. Should everything check out, the next Starship flight could deliver one of the most spectacular recoveries in aerospace history.
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Elon Musk explains what happens when AI outsmarts all of us
Tesla adds new ‘Traction Control Modes’ for better handling in any conditions
