Performance, lifetime, and cost of hybrid electric vehicles and similar applications requiring peak power are directly affected by battery lifetime, performance, cost, and reliability. Different types of rechargeable energy storage systems exist in the market but none can fulfill all the demands but, rather, are designed for specific applications and uses. The performance of lithium-ion batteries is strongly affected by environmental conditions (e.g., operating temperature) and affecting cycling behavior and side reactions resulting in capacity losses. The aging degradation and reduction of the battery lifetime is subject to nonlinear phenomena influenced by temperature and another operational conditions. This chapter focuses on the degradation mechanisms inside lithium iron phosphate batteries (7 Ah cells) at different storage temperatures (60, 40, 25, 10, 0, and − 10 °C) and state of charge (SoC) levels (100%, 75%, 50%, and 25%). From the experimental results, one can observe that the capacity degradation is considerably higher at higher storage temperatures (e.g., 60 and 40 °C) compared to lower temperatures. The higher-capacity degradation is related to the parasitic reactions that occur at higher temperatures, whereby loss of active material and lithium-ion become determining factors. This observation has been confirmed by the increase of the internal resistance, whereby the main contributor is the growth of the solid electrolyte interface. Furthermore, the experimental results show that higher SoC levels have a negative impact on the battery capacity degradation compared to lower SoC levels (e.g., 25%). From the performed analysis, one can conclude that a lithium-ion battery should be kept in a temperature range lower than 40 °C and 75% SoC during its calendar life for guaranteeing long lifetime of the battery.