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Tesla battery supplier see surge amidst IRA tax incentives

Image used with permission for Teslarati. (Credit: Tom Cross)

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Tesla stock has been in the midst of a surge recently, specifically after the Model 3 sedan reached price parity with the Toyota Camry. Tesla battery suppliers are also seeing increased support from investors as they realize the impact of the Inflation Reduction Act. 

Panasonic shares climbed up 45% year-to-date in Tokyo, while LG Energy Solutions (LGES) went up 36%. Panasonic and LGES are both long-time Tesla battery suppliers and are outpacing their local benchmarks. 

Not all of Tesla’s battery suppliers are experiencing a share surge, though. Contemporary Amperex Technology Co. (CATL) is down 4.5%, missing out on a rally. Bloomberg points out that non-Chinese battery suppliers are experiencing a surge while CATL—one of the top battery suppliers in the world—is not. 

The Inflation Reduction Act (IRA) may be credited for South Korean battery supplier LGES and Japanese battery supplier Panasonic’s stock spike this year. In a Citi note, industry expert Christ Berry estimated that IRA credits could reach $1 trillion compared to the U.S. Congressional Budget Office’s estimate of $369 billion over 10 years. 

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During a Citi seminar, Berry stated that China’s dominant share in the refining market is “an obstacle to IRA mechanisms working and that various ideas to build a US-led scheme to reduce dependency on China were being considered.” 

Citigroup analyst Kota Ezawa hinted that non-Chinese companies are more likely to benefit from the Inflation Reduction Act. Reports of a US-China tech war suggest that the United States aims to rely less on the Asian giant. 

The Inflation Reduction Act’s influence already affects automakers in the United States and worldwide. Local automakers are teaming up with foreign battery suppliers, like LGES, to build domestic cell manufacturing in the United States. 

Tesla isn’t immune to the IRA’s influence either. On March 31, 2023, The U.S. Treasury released battery guidance for the Inflation Reduction Act’s $7,500 EV tax credits. The guidance covered battery production, assembly, and mineral sourcing requirements to qualify for incentives. 

Tesla’s Model 3 RWD units were immediately affected by the battery requirements. The Tesla Model 3 RWD’s battery pack is produced and assembled in China, reducing its IRA tax incentives. Earlier this month, all Tesla Model 3 units—including the RWD variant—qualified for the full $7,500 tax credit under the IRA. With state EV tax credits, the Model 3 became cheaper than the Toyota Camry in California. 

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Tesla’s recent stock spike may be attributed to the Model 3 reaching price parity with fossil fuel vehicles. However, maybe the true takeaway from the Model 3’s latest achievement is the full potential of the IRA. 

The Teslarati team would appreciate hearing from you. If you have any tips, contact me at maria@teslarati.com or via Twitter @Writer_01001101.

Maria--aka "M"-- is an experienced writer and book editor. She's written about several topics including health, tech, and politics. As a book editor, she's worked with authors who write Sci-Fi, Romance, and Dark Fantasy. M loves hearing from TESLARATI readers. If you have any tips or article ideas, contact her at maria@teslarati.com or via X, @Writer_01001101.

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Tesla to improve one of its best features, coding shows

According to the update, Tesla will work on improving the headlights when coming into contact with highly reflective objects, including road signs, traffic signs, and street lights. Additionally, pixel-level dimming will happen in two stages, whereas it currently performs with just one, meaning on or off.

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Credit: @jojje167 on X

Tesla is looking to upgrade its Matrix Headlights, a unique and high-tech feature that is available on several of its vehicles. The headlights aim to maximize visibility for Tesla drivers while being considerate of oncoming traffic.

The Matrix Headlights Tesla offers utilize dimming of individual light pixels to ensure that visibility stays high for those behind the wheel, while also being considerate of other cars by decreasing the brightness in areas where other cars are traveling.

Here’s what they look like in action:

As you can see, the Matrix headlight system intentionally dims the area where oncoming cars would be impacted by high beams. This keeps visibility at a maximum for everyone on the road, including those who could be hit with bright lights in their eyes.

There are still a handful of complaints from owners, however, but Tesla appears to be looking to resolve these with the coming updates in a Software Version that is currently labeled 2026.2.xxx. The coding was spotted by X user BERKANT:

According to the update, Tesla will work on improving the headlights when coming into contact with highly reflective objects, including road signs, traffic signs, and street lights. Additionally, pixel-level dimming will happen in two stages, whereas it currently performs with just one, meaning on or off.

Finally, the new system will prevent the high beams from glaring back at the driver. The system is made to dim when it recognizes oncoming cars, but not necessarily objects that could produce glaring issues back at the driver.

Tesla’s revolutionary Matrix headlights are coming to the U.S.

This upgrade is software-focused, so there will not need to be any physical changes or upgrades made to Tesla vehicles that utilize the Matrix headlights currently.

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xAI’s Grok approved for Pentagon classified systems: report

Under the agreement, Grok can be deployed in systems handling classified intelligence analysis, weapons development, and battlefield operations. 

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Credit: xAI

Elon Musk’s xAI has signed an agreement with the United States Department of Defense (DoD) to allow Grok to be used in classified military systems.

Previously, Anthropic’s Claude had been the only AI system approved for the most sensitive military work, but a dispute over usage safeguards has reportedly prompted the Pentagon to broaden its options, as noted in a report from Axios.

Under the agreement, Grok can be deployed in systems handling classified intelligence analysis, weapons development, and battlefield operations. 

The publication reported that xAI agreed to the Pentagon’s requirement that its technology be usable for “all lawful purposes,” a standard Anthropic has reportedly resisted due to alleged ethical restrictions tied to mass surveillance and autonomous weapons use.

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Defense Secretary Pete Hegseth is scheduled to meet with Anthropic CEO Dario Amodei in what sources expect to be a tense meeting, with the publication hinting that the Pentagon could designate Anthropic a “supply chain risk” if the company does not lift its safeguards. 

Axios stated that replacing Claude fully might be technically challenging even if xAI or other alternative AI systems take its place. That being said, other AI systems are already in use by the DoD. 

Grok already operates in the Pentagon’s unclassified systems alongside Google’s Gemini and OpenAI’s ChatGPT. Google is reportedly close to an agreement that will result in Gemini being used for classified use, while OpenAI’s progress toward classified deployment is described as slower but still feasible. 

The publication noted that the Pentagon continues talks with several AI companies as it prepares for potential changes in classified AI sourcing.

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Elon Musk denies Starlink’s price cuts are due to Amazon Kuiper

“This has nothing to do with Kuiper, we’re just trying to make Starlink more affordable to a broader audience,” Musk wrote in a post on X.

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Credit: Starlink

Elon Musk has pushed back on claims that Starlink’s recent price reductions are tied to Amazon’s Kuiper project.

In a post on X, Musk responded directly to a report suggesting that Starlink was cutting prices and offering free hardware to partners ahead of a planned IPO and increased competition from Kuiper.

“This has nothing to do with Kuiper, we’re just trying to make Starlink more affordable to a broader audience,” Musk wrote in a post on X. “The lower the cost, the more Starlink can be used by people who don’t have much money, especially in the developing world.”

The speculation originated from a post summarizing a report from The Information, which ran with the headline “SpaceX’s Starlink Makes Land Grab as Amazon Threat Looms.” The report stated that SpaceX is aggressively cutting prices and giving free hardware to distribution partners, which was interpreted as a reaction to Amazon’s Kuiper’s upcoming rollout and possible IPO.

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In a way, Musk’s comments could be quite accurate considering Starlink’s current scale. The constellation currently has more than 9,700 satellites in operation today, making it by far the largest satellite broadband network in operation. It has also managed to grow its user base to 10 million active customers across more than 150 countries worldwide. 

Amazon’s Kuiper, by comparison, has launched approximately 211 satellites to date, as per data from SatelliteMap.Space, some of which were launched by SpaceX’s Falcon 9 rocket. Starlink surpassed that number in early January 2020, during the early buildout of its first-generation network.

Lower pricing also aligns with Starlink’s broader expansion strategy. SpaceX continues to deploy satellites at a rapid pace using Falcon 9, and future launches aboard Starship are expected to significantly accelerate the constellation’s growth. A larger network improves capacity and global coverage, which can support a broader customer base.

In that context, price reductions can be viewed as a way to match expanding supply with growing demand. Musk’s companies have historically used aggressive pricing strategies to drive adoption at scale, particularly when vertical integration allows costs to decline over time.

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