China’s BYD halts pouch battery production in its best-selling hybrid electric vehicles (EVs). This strategic move by the top-selling battery electric vehicle manufacturer in the world after overtaking Tesla in the fourth quarter of 2023 comes in response to increasing concerns over the durability and potential leakage risks associated with these batteries.

BYD has been a global leader in battery-powered cars. However, recent developments suggest that the company is facing challenges related to the durability and safety of pouch-type batteries used in its hybrid vehicles.

The primary concern revolves around pouch-type batteries. These batteries, wrapped in thin films of aluminum, have been identified as having a higher probability of leaking electrolytes. While no public reports of such leakages from BYD cars have surfaced, the potential risk isn’t lost on the company or industry experts.

Leaking electrolytes, in extreme cases, can lead to the battery burning or even exploding. This risk has prompted other automakers to reassess their use of such batteries. In 2021, Volkswagen announced it was moving away from pouch-type batteries, citing their potential risks. Even Tesla’s CEO, Elon Musk, has expressed strong reservations about their usage due to the “dangerously high” probability of a surge in battery temperature.

In 2022, BYD took a proactive step in managing this risk by recalling over 60,000 units of its Tang DM-i hybrids that used pouch-type batteries. The recall was prompted by a defect in the battery pack that could lead to a “thermal runaway,” a situation where an increase in temperature causes a further increase, potentially leading to catastrophic failure.

To address these concerns, the premier provider of battery-powered vehicles globally started converting production lines. Factories located in Shaanxi and Zhejiang provinces began transitioning from pouch-type cells to prismatic batteries, according to the report.

One source familiar with the matter disclosed that BYD continues its pouch battery production at a third factory in Qinghai province to minimize disruptions in the production of its hybrid vehicles, which accounted for almost half of its global sales last year. However, plans are underway to switch this factory to prismatic batteries as well, as to completely phase out pouch cells by early 2025.

Even industry giants like BYD aren’t immune to the challenges in the EV industry. In an ambitious bid to rival Tesla on a global stage, BYD is facing uncertainties around its battery technology, particularly in its core home market where most of its hybrid vehicles are sold.

Image Source: BNN Bloomberg