diff --git a/sdk_container/.repo/manifests/version.txt b/sdk_container/.repo/manifests/version.txt
index 6e13fb7ccf..3733d21daa 100644
--- a/sdk_container/.repo/manifests/version.txt
+++ b/sdk_container/.repo/manifests/version.txt
@@ -1,4 +1,4 @@
-FLATCAR_VERSION=3405.0.0+nightly-20221027-2100
-FLATCAR_VERSION_ID=3405.0.0
-FLATCAR_BUILD_ID="nightly-20221027-2100"
-FLATCAR_SDK_VERSION=3405.0.0+nightly-20221027-2100
+FLATCAR_VERSION=3406.0.0+nightly-20221028-2100
+FLATCAR_VERSION_ID=3406.0.0
+FLATCAR_BUILD_ID="nightly-20221028-2100"
+FLATCAR_SDK_VERSION=3406.0.0+nightly-20221028-2100
diff --git a/sdk_container/src/third_party/coreos-overlay b/sdk_container/src/third_party/coreos-overlay
index b8cb3cb7f5..86ee5c47f6 160000
--- a/sdk_container/src/third_party/coreos-overlay
+++ b/sdk_container/src/third_party/coreos-overlay
@@ -1 +1 @@
-Subproject commit b8cb3cb7f544d62734103a6afb43e3f59edecc6d
+Subproject commit 86ee5c47f6072899ced94d3a8ba5427373a0e631