Tesla to produce pouch cells at Shanghai Giga despite prior safety concerns from Elon Musk over thermal runaway

Tesla recently applied for regulatory approval to further expand its Shanghai Gigafactory plant in an effort to dramatically increase output and add production capacity for pouch batteries, according to Reuters. The Shanghai plant is already Tesla's most productive facility, with more than half of Teslas sold in 2022 made there. Tesla's planned expansion aims to add 500,000 drivetrain units per year, for a total of 1.75 million units. 

In the same regulatory notice, Tesla also applied for approval to produce pouch cells, with an annual production capacity of 20,000 amp-hours. It's unclear whether Tesla is moving to pouch cells wholesale, or if the company is simply running an experiment, but pouch cells do offer some weight and packaging advantages over the cylindrical cells Tesla is known for.

This increase and move to pouch cell production comes after Tesla struck a deal with BYD to supply LFP batteries to Tesla's Giga Berlin for a new Model 3 SKU to be produced there. Tesla even considering pouch cells is particularly interesting, since CEO Elon Musk has stated not too long ago that pouch cells are simply too dangerous for EV use.

Perhaps the safety advances made in the LFP space have made pouches worth looking into, or, more likely, Tesla is looking for ways to maintain a competitive edge now that competition like BYD, Chevrolet, and Hyundai are starting to encroach on its territory in a serious way.

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