Carbon-coated nano-Li4Ti5O12 (LTO) anode material was prepared and evaluated with 5.5 Ah pouch cells, paired with LiNi1/3Co1/3Mn1/3O2 cathode for potential hybrid electric vehicle (HEV) application. The as-prepared LTO batteries showed excellent electrochemical performance. They delivered a peak discharge power density of ca. 2,800 W kg−1, and featured a high power (94 and 92 % of discharge and charge capacity at 20 C, respectively) and a prolonged cycle life (89 % capacity retention after 5,000 cycles at 10 C charge and discharge rate). However, the severe capacity decay was observed at elevated temperatures because of loose (worse) interfaces caused by gas generation. It was found that H2 was the dominant gas component, and the inflation rate had an Arrhenius-type correlation with storage temperature. The battery inflation, arising from side reactions between electrolyte and LTO anode, is the major technical barrier for practical application of the LTO batteries in HEV.