BYD last month began converting its pouch-type battery cell production lines at two of its factories to produce prismatic batteries, but is still producing pouch cells at a third plant, according to Reuters.

(Image credit: CnEVPost)

BYD (OTCMKTS: BYDDF) plans to stop producing pouch-type batteries used in its plug-in hybrid vehicles (PHEVs) as it seeks to address durability issues and the risk that the batteries could leak, Reuters said in a report today, citing three people familiar with the matter.

BYD last month began converting its pouch-type battery cell production lines at its two factories in Shaanxi and Zhejiang to produce prismatic batteries, a person with direct knowledge of the matter said.

The company is still producing pouch-type batteries at a third plant in Qinghai to minimize disruption to hybrid vehicle production, but also plans to make the switch and stop using pouch batteries altogether by early 2025, the person said.

No battery leaks have been reported to the public by BYD or Chinese regulators, but the company and some industry experts believe that pouch batteries have a higher likelihood of leaking electrolyte, according to the report.

EVs use three main types of batteries -- cylindrical, prismatic and pouch type - with the first two being wrapped in hard materials, and pouch batteries are also widely used in consumer electronics, the report noted.

BYD launched its self-developed hybrid technology in 2021, including blade-shaped battery packs containing pouch cells, the report said.

The company uses such batteries in all of its PHEVs, which account for 48 percent of its total vehicle sales of 3 million units in 2023 and almost all of which are sold in China, according to the report.

BYD plans to replace the pouch batteries in its PHEVs with a type of prismatic battery known as "Short Blade", which is similar in structure to the Blade Battery used in battery electric vehicles (BEVs) with stacked foils but is shorter in length, Reuters said, citing one of the sources.

BYD unveiled its signature Blade Battery in March 2020, based on lithium iron phosphate (LFP) chemistry.

The company does not source batteries externally and produces most of its batteries for its own use. All of its current BEV models are equipped with Blade Batteries.

BYD is China's largest new energy vehicle (NEV) maker, selling 341,043 NEVs in December, according to figures it released earlier this month.

For the full year of 2023, BYD sold 3,024,417 NEVs, reaching its target of 3 million units, up 62.3 percent year-on-year.

BYD is also the second-largest power battery maker, with a global share of 15.7 percent in the January-November period, behind CATL's 37.4 percent, according to South Korean market researcher SNE Research.

In China's power battery market, BYD ranked second with a 22.95 percent share in December, according to China Automotive Battery Innovation Alliance (CABIA).

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