Tesla Starts Building Cars With In-House 4680 Cells After Dry-Electrode Breakthrough

Tesla has quietly dropped one of the most important announcements in its recent history, and surprisingly, it almost flew under the radar. Buried inside Tesla’s fourth-quarter earnings report and full-year update was confirmation of a major battery technology breakthrough—one that analysts had long written off as impossible.

Tesla has now successfully industrialized its 4680 battery cells using a dry-electrode process for both the anode and the cathode. Even more significant, these batteries are already being used in production vehicles, starting with ultra long-range Model Y variants in the United States.

This development could reshape Tesla’s cost structure, supply chain resilience, and long-term competitive advantage in electric vehicles. Let’s break down why this matters, what Tesla actually achieved, and what it means for the future of EVs.

Tesla’s Q4 Earnings Report: The Hidden Bombshell

Tesla’s Q4 earnings call was packed with ambitious promises, future projections, and strategic updates. Between discussions about AI, autonomy, manufacturing efficiency, and vehicle lineup decisions, it was easy to miss a subtle but game-changing disclosure.

Tesla Starts Building Cars With In-House 4680 Cells

Tesla confirmed that it is now producing 4680 battery cells with both dry cathode and dry anode technology—a feat the company has been chasing since Battery Day in 2020.

For years, critics labeled the 4680 program a failure. Some industry leaders openly mocked it. Others insisted it would never work at scale. Yet here we are.

Tesla didn’t just solve the problem—it quietly moved it into production.

What Are 4680 Battery Cells?

Understanding the 4680 Format

The name “4680” refers to the cell’s dimensions:

46 mm diameter
80 mm height

Compared to Tesla’s older 2170 cells, 4680 cells are:

Larger
More energy-dense
Designed for structural integration into the vehicle

This design reduces the number of cells needed per vehicle, simplifies pack architecture, and improves overall vehicle efficiency.

Why Tesla Bet Big on 4680 Cells

Tesla envisioned the 4680 as a revolutionary battery platform that would:

Lower battery costs dramatically
Increase driving range
Improve vehicle structural rigidity
Reduce factory footprint
Speed up production

However, one critical hurdle stood in the way: the dry-electrode process.

The Dry-Electrode Process Explained

Wet vs Dry Electrode Manufacturing

Traditional lithium-ion batteries use a wet slurry process, where:

Active materials are mixed with solvents
Coated onto metal foils
Dried using massive ovens
Solvents are recovered and recycled

This method is:

Energy-intensive
Expensive
Slow
Space-hungry

Tesla’s alternative? Dry electrodes.

Why Dry Electrodes Are a Game-Changer

The dry-electrode process eliminates liquid solvents entirely. This allows Tesla to:

Cut production steps
Reduce energy consumption
Shrink factory size
Lower capital costs
Increase energy density

On paper, it was brilliant.

In practice, it was incredibly difficult—especially when scaling up.

Why Analysts Thought the 4680 Program Had Failed

For years, Tesla struggled with:

Inconsistent yields
Mechanical stability issues
Manufacturing bottlenecks
Dry cathode scalability problems

Industry analysts were brutal.

Some called the 4680 “dead on arrival.”
Others claimed Tesla would abandon the project entirely.

Even rival battery executives publicly stated that the technology would never work at scale.

Yet Tesla kept pushing.

The Breakthrough: Dry Anode and Dry Cathode Achieved

Tesla’s Confirmation Changes Everything

In Tesla’s Q4 and full-year update letter, the company confirmed:

It is now producing 4680 cells with both anode and cathode manufactured using the dry-electrode process.

This single sentence resolved years of uncertainty.

It means:

The hardest technical challenge has been solved
Tesla can now scale production efficiently
The 4680 platform is no longer experimental

This revelation was later highlighted publicly by Tesla’s Vice President of 4680 Batteries, confirming that both electrodes are now produced using the dry process.

From Theory to Reality: 4680 Cells in the Model Y

Tesla Begins Production of Long-Range Model Y Packs

Tesla also revealed that it has already begun producing battery packs for certain Model Y vehicles using in-house 4680 cells.

This is not a prototype.
This is not a test fleet.
This is real production.

Tesla stated that these batteries provide:

An additional supply vector
Greater resilience against tariffs and trade barriers
More control over costs

Why the Model Y Matters Most

The Model Y is:

Tesla’s best-selling vehicle globally
The backbone of Tesla’s revenue
Central to Tesla’s future growth strategy

With Model S and Model X production winding down, Model Y and Model 3 now account for the vast majority of Tesla sales.

Improving the Model Y’s range, cost efficiency, and supply chain stability is strategically critical.

Why This Matters for Tesla’s U.S. Strategy

Avoiding Tariffs and Supply Chain Risks

Producing batteries in-house in the United States helps Tesla:

Avoid tariff volatility
Reduce reliance on foreign suppliers
Navigate geopolitical uncertainty

Tesla explicitly cited trade barriers and tariff risks as a reason for accelerating in-house battery production.

Why Tesla Won’t Use 4680 Cells Everywhere

Despite the breakthrough, Tesla is unlikely to deploy 4680 cells globally—at least not yet.

Here’s why:

Batteries sourced in China and Germany are currently cheaper
Tesla faces no battery tariffs in those regions
Shipping 4680 cells internationally wouldn’t make economic sense

For now, 4680 production is a U.S.-focused advantage.

Energy Density and Range: What Could Change?

Will the New 4680 Cells Improve Range?

The big question: Are these batteries better?

The answer is: very possibly—yes.

Dry-electrode technology has the potential to:

Increase energy density
Reduce internal resistance
Improve thermal performance

That could translate to:

Longer range
Better efficiency
Improved performance

However, confirmation will require real-world testing or a teardown analysis—something experts like Sandy Munro are known for.

BMW Copied Tesla—And It Paid Off

The Industry Took 4680 Seriously

When Tesla first unveiled the 4680 format, many laughed.

But one company didn’t: BMW.

BMW worked with its battery supplier to develop a similar cylindrical battery format, slightly larger than Tesla’s 4680. The result?

Over 800 km of range
Record-breaking EV demand
Six months of global production sold out

This validates Tesla’s original vision.

The technology wasn’t flawed.
It was just early.

Tesla’s Manufacturing Vision: Batteries Like Coke Bottles

Tesla once described its goal as producing batteries “like Coke bottles”—fast, cheap, and endlessly scalable.

The dry-electrode process is the final missing piece of that vision.

Now that it’s working:

Production speed can increase dramatically
Factory costs can fall
Battery prices can continue declining

This strengthens Tesla’s long-term cost advantage.

What This Means for Tesla’s Future

No New Models, Just Better Technology

Tesla has confirmed:

No new traditional vehicle models
No conventional pickup variant of the Cybertruck
A sharp focus on efficiency and scale

Instead of expanding its lineup, Tesla is:

Improving core products
Reducing costs
Advancing battery and manufacturing tech

This is classic Tesla.

Why the 4680 Breakthrough Is Bigger Than It Sounds

This isn’t just a battery update.

It’s:

A manufacturing revolution
A cost-structure shift
A competitive moat

Tesla has now proven that its most ambitious battery idea actually works.

Years late?
Yes.

Still transformational?
Absolutely.

Final Thoughts: A Quiet Win With Loud Implications

Tesla didn’t hype this announcement.
There was no flashy presentation.
No grand unveiling.

But make no mistake—this is one of Tesla’s most important achievements in years.

The 4680 battery program is alive.
The dry-electrode process works.
And Tesla is already building cars with it.

The next chapter of EV innovation just quietly began.

FAQs

1. What is Tesla’s 4680 battery cell?

The 4680 battery cell is Tesla’s next-generation cylindrical battery, measuring 46 mm wide and 80 mm tall, designed to deliver higher energy density, lower cost, and improved manufacturing efficiency compared to previous cells.

2. What makes the 4680 battery different from older Tesla batteries?

Unlike older batteries, the 4680 cell supports structural battery packs, uses fewer cells per vehicle, and is designed for faster, cheaper, and more scalable production.

3. What is the dry-electrode process Tesla uses?

The dry-electrode process eliminates liquid solvents from battery manufacturing, reducing energy use, factory size, production time, and overall cost while improving energy density.

4. Why is the dry-electrode breakthrough so important?

Because it was the biggest technical bottleneck preventing mass production of 4680 cells. Solving it means Tesla can finally scale the technology profitably.

5. Did Tesla solve both dry cathode and dry anode production?

Yes. Tesla confirmed that both the cathode and anode of its 4680 cells are now produced using the dry-electrode process.

6. Are 4680 batteries already being used in Tesla vehicles?

Yes. Tesla has begun producing battery packs for certain Model Y vehicles using in-house 4680 cells in the United States.

7. Which Tesla models will get the 4680 batteries first?

Currently, select long-range Model Y variants built in the U.S. are the first to receive the new 4680 battery packs.

8. Will 4680 batteries increase driving range?

They can. Higher energy density and improved efficiency may result in longer range, but official range increases will need real-world testing and teardowns to confirm.

9. Are 4680 batteries cheaper to produce?

Yes. The dry-electrode process reduces materials, energy use, factory footprint, and capital costs, making 4680 batteries cheaper in the long term.

10. Why did some experts say the 4680 battery failed?

Early production faced low yields, scaling issues, and manufacturing complexity, leading many analysts to believe the technology would never work at scale.

11. Why didn’t Tesla abandon the 4680 project?

Tesla viewed 4680 cells as critical to its long-term cost and scaling strategy, so it continued refining the process despite setbacks.

12. Is Tesla using 4680 batteries outside the U.S.?

Not currently. Tesla mainly uses 4680 cells in the U.S. due to tariffs, supply chain risks, and cost advantages. Batteries from China and Germany remain cheaper for other markets.

13. Did other automakers copy Tesla’s 4680 design?

Yes. BMW adopted a similar large cylindrical battery format, which helped it achieve over 800 km of range in upcoming EV models.

14. Does the 4680 battery improve vehicle performance?

Potentially. Improved thermal management and lower internal resistance can enhance efficiency, acceleration, and sustained performance.

15. Will Tesla release new car models because of 4680 batteries?

No. Tesla has confirmed it will not introduce new traditional vehicle models, focusing instead on improving existing ones with better technology.

16. How does the 4680 battery help Tesla’s supply chain?

In-house battery production gives Tesla greater control, reduces dependence on suppliers, and helps mitigate tariffs and geopolitical risks.

17. Is the 4680 battery Tesla’s biggest innovation in years?

Yes. Many experts see it as a foundational breakthrough that strengthens Tesla’s manufacturing advantage and shapes the future of affordable, long-range electric vehicles.