A major obstacle to the development of commercially successful electric vehicles (EV) or hybrid electric vehicles (HEV) is the lack of a suitably sized battery. Lithium ion batteries are viewed as the solution if only they could be “scaled-up safely”, i.e. if thermal management problems could be overcome so the batteries could be designed and manufactured in much larger sizes than the commercially available near-2-Ah cells. Here, we review a novel thermal management system using phase-change material (PCM). A prototype of this PCM-based system is presently being manufactured. A PCM-based system has never been tested before with lithium-ion (Li-ion) batteries and battery packs, although its mode of operation is exceptionally well suited for the cell chemistry of the most common commercially available Li-ion batteries. The thermal management system described here is intended specifically for EV/HEV applications. It has a high potential for providing effective thermal management without introducing moving components. Thereby, the performance of EV/HEV batteries may be improved without complicating the system design and incurring major additional cost, as is the case with “active” cooling systems requiring air or liquid circulation.