The rapid development of new energy vehicles puts higher requirements on the high temperature safety of square shell lithium-ion batteries. In this study, the thermal failure mechanism of ternary square-cell batteries is revealed by simulating extreme high-temperature radiation through flame roasting: under 300 ℃ roasting, the shell and explosion-proof valve are severely damaged, and the internal temperature reaches 325 ℃, while the surface of the electric cell is maintained at less than 150 ℃ due to air insulation, but the temperature of the positive and negative columns rises abruptly at 300 s, which indicates the critical point of thermal runaway. Thermal damage led to a significant increase in internal resistance, which triggered output voltage reduction, power degradation, and capacity multiplicity-dependent loss (2C degradation of 4.25%). At the microscopic level, crystal phase transition of positive and negative electrodes, short circuit within the perforated diaphragm, and decomposition of electrolyte synergistically drive the chain reaction of ‘material degradation-thermal runaway’, and the critical temperature threshold is 150–180 °C. The results of this study provide a good basis for the design of power batteries for thermal safety. The results of the study provide key data support for the thermal safety design of power batteries and the optimisation of industry standards.