This paper describes the development of a computational model of a traction battery system for hybrid vehicle application. The battery model simulates the electrical and thermal performance of the entire battery system, including series and/or parallel cell design configuration in the pack, cell energy/power performance, thermal and electrical controls, and interfaces to the vehicle and external environment. The battery model is capable of estimating the battery performance and predicting the battery life under a variety of use cases in different environmental conditions. The model enables rapid optimization of battery pack size, electrical and thermal controls design to maximize battery usage and/or minimize battery cooling needs while still meeting the battery’s life targets. A systematic approach has been developed in which this vehicle-level information is quantified and ranked to be able to identify and simulate the battery usage for varieties of customer. Simulation results are verified with variety of laboratory and vehicle test data. The availability of this battery pack model enables minimizing of costly and time-consuming pack-level performance and life testing, allowing the majority of the life cycle analyses to be conducted before battery packs and vehicles are actually assembled. The model aims to ensure that when the battery pack model is utilized for life simulations, compliance with the battery pack warranty and fuel economy targets, as well as other vehicle standards, may be quickly and reliably assessed. The accuracy of the model predicted battery life performances is further validated with real field application vehicle data from customer return pack.