We tested three lithium-ion cells to evaluate capacity and power fade during cycle life testing of a hybrid electric vehicle (HEV) cell with varying state of charge (ΔSOC). Test results showed that the cells had sufficient power and energy capability to meet the Partnership for a New Generation of Vehicles (PNGV), now called FreedomCAR, goals for Power Assist at the beginning of life and after 120,000 life cycles using 48 cells. The initial static capacity tests showed that the capacity of the cells stabilized after three discharges at an average of 14.67Ah. Capacity faded as expected over the course of 120,000 life cycles. However, capacity fade did not vary with ΔSOC. The hybrid pulse power characterization (HPPC) tests indicated that the cells were able to meet the power and energy goals at the beginning of testing and after 120,000 life cycles. The rate of power fade of the lithium-ion cells during cycle life testing increased with increasing ΔSOC. Capacity fade is believed to be due to lithium corrosion at the anode, and power fade suggested a buildup of the SEI layer or a decrepitation of the active material.