Tesla has started building Model Y battery packs with its in-house 4680 cells again, more than two years after pulling the plug on the original 4680-equipped Model Y to prioritize Cybertruck production. The motivation behind this decision isn't revolutionary battery tech, but rather tariffs and poor sales of the Cybertruck.
In Tesla's Q4 2025 shareholder update, the company disclosed that it has begun producing battery packs for certain Model Ys with its 4680 cells, unlocking an additional vector of supply to help navigate increasingly complex supply chain challenges caused by trade barriers and tariff risks. The company also noted progress on domestic battery production, including the production of dry-electrode for 4680 cells with both anode and cathode made in Austin.
Tesla's decision to re-introduce the 4680 cell into the Model Y is a strategic move to diversify its supply chain and hedge against tariff risks, rather than a return to its original vision of using the technology to cut battery costs in half and enable a $25,000 Tesla. Despite this, there is still genuine progress being made by Tesla, including the production of dry-electrode cells with both anode and cathode made domestically in Austin.
However, let's not pretend that this is what Elon Musk promised at Battery Day - the 4680 was supposed to be the key to Tesla's future, but it has become a backup plan.
Tesla's decision to re-introduce the 4680 cell into the Model Y is a pragmatic move to address supply chain challenges and tariff risks. However, this shift in strategy highlights how the company's original vision for the technology has been altered by market realities and changing priorities.
