Lithium-ion (Li-ion) batteries are favored in hybrid-electric vehicles and electric vehicles for their outstanding power characteristics. In this paper the energy loss due to electrical contact resistance (ECR) at the interface of electrodes and current-collector bars in Li-ion battery assemblies is investigated for the first time. ECR is a direct result of contact surface imperfections, i.e., roughness and out-of-flatness, and acts as an ohmic resistance at the electrode–collector joints. A custom-designed testbed is developed to conduct a systematic experimental study. ECR is measured at separable bolted electrode connections of a sample Li-ion battery, and a straightforward analysis to evaluate the relevant energy loss is presented. Through the experiments, it is observed that ECR is an important issue in energy management of Li-ion batteries. Effects of surface imperfection, contact pressure, joint type, collector bar material, and interfacial materials on ECR are highlighted. The obtained data show that in the considered Li-ion battery, the energy loss due to ECR can be as high as 20% of the total energy flow in and out of the battery under normal operating conditions. However, ECR loss can be reduced to 6% when proper joint pressure and/or surface treatment are used. A poor connection at the electrode–collector interface can lead to a significant battery energy loss as heat generated at the interface. Consequently, a heat flow can be initiated from the electrodes towards the internal battery structure, which results in a considerable temperature increase and onset of thermal runaway. At sever conditions, heat generation due to ECR might cause serious safety issues, sparks, and even melting of the electrodes.