The first facelift variant of the Panda introduced in 1980 was released in 1986.
The Panda received both technical and visual revisions. The rear suspension was upgraded, the car’s body was strengthened and galvanized to avoid rust. The biggest upgrade was represented by the transition from the air-cooled two-cylinder engines to water-cooled four-cylinder ones.

A van variant was also introduced in the same year, available until 1994, fitted with two engine variants, gasoline or diesel. The rear seats were ditched and the rear windows were replaced by plastic blanking panels. The diesel and the van versions were not produced for right hand markets.

Fiat introduced two new engines: a 769cc producing 34 HP and a 999cc with 45 HP or 50 HP for the 4x4 variant. In mid 1986, the Panda received a 1301cc diesel engine producing 37 HP, paired with a 5-speed gearbox.

In 1986, four Fiat Panda variants were available: 750 L, 1000 4x4, 1000S and 1000CL. In 1990, Fiat also released released a two-seater version called the Panda Elettra – its name coming from the all-electric powertrain that was added. The batteries were placed where the rear seats used to be. The Elettra was significantly heavier than the ICE-powered Panda, adding 450 kg, so the suspension and brakes were modified to cope with the extra weight of the batteries. That said, the Elettra was considered a commercial failure and was discontinued in 1998.