Lithium-ion (Li-ion) battery pack is vital for storage of energy produced from different sources and has been extensively used for various applications such as electric vehicles (EVs), watches, cookers, etc. For an efficient real-time monitoring and fault diagnosis of battery operated systems, it is important to have a quantified information on the state-of-health (SoH) of batteries. This paper conducts comprehensive literature studies on advancement, challenges, concerns, and futuristic aspects of models and methods for SoH estimation of batteries. Based on the studies, the methods and models for SoH estimation have been summarized systematically with their advantages and disadvantages in tabular format. The prime emphasis of this review was attributed toward the development of a hybridized method which computes SoH of batteries accurately in real-time and takes self-discharge into its account. At the end, the summary of research findings and the future directions of research such as nondestructive tests (NDT) for real-time estimation of battery SoH, finding residual SoH for the recycled batteries from battery packs, integration of mechanical aspects of battery with temperature, easy assembling–dissembling of battery packs, and hybridization of battery packs with photovoltaic and super capacitor are discussed.

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