Tesla's Cybertuck Faces Major Roadblock as 4680 Battery Deal Slashed

Electric Vehicle (EV) giant Tesla’s TSLA Cybertruck plans have suffered a major setback after South Korean battery materials supplier L&F Co announced that its 4680 battery deal has been reduced to a fraction of its original value, according to Electrek.

L&F stated in its regulatory filings that the deal has now been reduced from $2.9 billion to just $7,386, a reduction of nearly 99% from its original value. As previously announced in early 2023, the contract was intended to supply high-nickel cathode materials directly to Tesla from January 2024 through December 2025.

It was considered to be one of the major moves by Tesla to secure materials for 4680 battery cells, as Tesla founder once described this deal as the key to splitting battery costs and enabling cheaper electric vehicles to attract customers.

In 2020, Tesla announced plans to mass-produce its 4680 batteries, which were expected to be less expensive and enable the development of a smaller, more affordable $25,000 electric vehicle with full autonomy, while also delivering a smoother user experience.

However, as EV demand slowed, Tesla struggled to ramp up production, and development of the 4680 cells slowed. As a result, the company said it no longer needs as much cathode material from L&F as initially expected.

L&F did not cite a specific reason for the reduced deal beyond a change in supply volume. Tesla uses high-nickel cathodes for its 4680 cells, which are primarily deployed in the Cybertruck—a vehicle that has been a major disappointment for customers.

Despite a production capacity of 250,000 units per year at Giga Texas, the Cybertruck is currently selling at a run rate of roughly 20,000 to 25,000 units annually. Earlier in March, Tesla employed a discounted strategy, particularly to clear out its inventory due to the low demand for the Cybertruck. In June, Tesla launched 0% APR incentive programs to clear a buildup of inventory.

Due to lackluster demand, Tesla discontinued its lowest-priced Cybertruck variant in September, as the model failed to attract sufficient customer interest. Previously, Tesla had used 4680 batteries in the Model Y, but negative customer feedback, including charging issues and lower-than-expected range, led the company to discontinue that configuration as well.

Tesla reported third-quarter 2025 revenues of $28.1 billion, up 12% year over year. The company delivered 497,099 vehicles, representing a 7% year-over-year increase and exceeding our estimate of 435,370 units. Model 3/Y deliveries totaled 481,166 vehicles, up 9% year over year and above our expectation of 416,456 units.

Tesla, Inc. Price, Consensus and EPS Surprise

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Zacks Rank & Key Picks

Tesla stock currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are General Motors (GM) and REV Group REVG, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GM’s 2025 and 2026 EPS has improved 8 cents and 47 cents, respectively, over the past 30 days.

The Zacks Consensus Estimate for REVG’s fiscal 2026 sales and earnings indicates year-over-year growth of 8.1% and 37.8%, respectively. The Zacks Consensus Estimate for REVG’s fiscal 2026 and 2027 EPS has improved 20 cents and 26 cents, respectively, over the past 30 days.

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