Tesla's updates on June 25th: Price hike for Model Y, Model S, and Model X; stock drops, settlement concerning 4680 cells announced
Tesla Updates Model Y and Advances Battery Technology
In a series of recent developments, Tesla has announced updates to its popular Model Y electric vehicle and continued advancements in battery technology.
Model Y Updates
Deliveries of the updated Model Y in China are expected to begin in March, with the vehicle now available for order in the West. The updated Model Y features a visual overhaul, both inside and out, and includes improvements in efficiency. Tesla has reduced wind resistance by implementing smaller brake calipers, resulting in an approximately 6% increase in range for the entire package.
The updated Model Y continues to use LG Energy cells for the new version in China and Europe, with a net capacity of around 78 kilowatt hours. However, Tesla is only offering the new Model Y in China, with the earlier versions no longer available for configuration.
Safety Enhancements
To enhance safety, a new radar sensor for the interior has been installed in the Model Y. This sensor is expected to improve airbag deployment accuracy and detect if someone has been left on the backseat.
Battery Technology Advancements
Tesla's broader battery production landscape is evolving. The company continues producing the 4680 battery cells primarily at its Fremont, California factory, with plans to expand production and introduce four new variants of the 4680 cell in 2026. The 4680 is Tesla’s advanced cell design intended to replace older formats like the 2170 cells, aiming for better performance and manufacturing efficiency.
However, Panasonic, Tesla’s key battery supplier, has delayed ramping up production at its new Kansas battery factory due to lower than expected demand, impacting the supply outlook for Tesla’s traditional 2170 cells. Meanwhile, Tesla has also unveiled a new lithium iron phosphate (LFP) battery plant near Gigafactory Nevada, employing wet coating technology sourced from CATL, reflecting Tesla’s strategic pivot to diversified chemistries in battery production.
Regarding future models, Tesla plans to use the upgraded 4680 variants starting in 2026, leveraging the improved Cybercell design to build vehicles like the Cybertruck. The company is focused on increasing scalability and cost-effectiveness of the 4680 cells, which represent a core technological leap for Tesla’s EV lineup.
No official announcements have been made about other next-generation batteries such as aluminium-ion cells, with the technology remaining speculative at this time.
Competitive Landscape
Competition in the electric vehicle market is heating up, with Chinese rival BYD having its best week since 2020. BYD managed to increase its sales in 2024 and at the start of 2025, with nearly half being pure electric vehicles. The company plans to reveal "smart driving" features across its electric vehicle lineup, potentially including Autopilot-like and FSD AI software.
Sales Performance
Tesla's sales in Europe have seen a significant decline in 2024 and January 2025, with a 41% drop in Germany and a 59% decrease in January compared to the previous year. France also experienced a similar decline, and the combined sales of the top 15 European markets dropped by around 47% to 9,605 electric cars. Tesla has increased the base versions of Model S and Model X by 17,000 euros in Germany, and the Plaid variants by at least 11%. The company also removed a €6,000 discount on its bestseller Model Y in Germany at the beginning of the year. However, all versions of Model S and Model X are now again offered with free charging at Superchargers.
These developments indicate Tesla is advancing 4680 production quality and scale, preparing to deploy it actively in upcoming vehicle models from 2026 onward, while facing competition from rivals like BYD.
- The updated Model Y, featuring design enhancements and efficiency improvements, is now available for order in the West.
- Tesla is producing the 4680 battery cells primarily at its Fremont, California factory, planning to expand production and introduce four new variants in 2026.
- To enhance safety, a new radar sensor for interior airbag deployment and seat occupancy detection has been installed in the Model Y.
- The electric vehicle market is experiencing increased competition, with Chinese rival BYD witnessing a surge in sales and planning to reveal smart driving features.
- Tesla's sales in Europe have seen a significant decline, with Germany and France experiencing drops of 41% and 59%, respectively, in 2024 and January 2025.
- Tesla's advancements in battery technology, particularly with the 4680 cells, are positioning the company to compete effectively in the electric automotive industry and beyond, as the company explores other next-generation technologies like aluminum-ion cells.
