diff --git a/sdk_container/.repo/manifests/version.txt b/sdk_container/.repo/manifests/version.txt
index a705641bb2..49519e9c4b 100644
--- a/sdk_container/.repo/manifests/version.txt
+++ b/sdk_container/.repo/manifests/version.txt
@@ -1,4 +1,4 @@
-FLATCAR_VERSION=3486.0.0+nightly-20230116-2100
-FLATCAR_VERSION_ID=3486.0.0
-FLATCAR_BUILD_ID="nightly-20230116-2100"
-FLATCAR_SDK_VERSION=3486.0.0+nightly-20230116-2100
+FLATCAR_VERSION=3488.0.0+nightly-20230118-2100
+FLATCAR_VERSION_ID=3488.0.0
+FLATCAR_BUILD_ID="nightly-20230118-2100"
+FLATCAR_SDK_VERSION=3488.0.0+nightly-20230118-2100
diff --git a/sdk_container/src/third_party/coreos-overlay b/sdk_container/src/third_party/coreos-overlay
index a3064f1d23..9bb860657a 160000
--- a/sdk_container/src/third_party/coreos-overlay
+++ b/sdk_container/src/third_party/coreos-overlay
@@ -1 +1 @@
-Subproject commit a3064f1d2349f24c8e9aef0dfae32ccde9bfc1fe
+Subproject commit 9bb860657a8ae96bee721cb662b71bef7bfa85e4