Li-ion batteries are crucial components for progress in mobile communications and transport technologies. However, Li-ion batteries suffer from strong self-heating, which limits their life-time and creates reliability and environmental problems. Here we show that thermal management and the reliability of Li-ion batteries can be drastically improved using hybrid phase change material with graphene fillers. Conventional thermal management of batteries relies on the latent heat stored in the phase change material as its phase changes over a small temperature range, thereby reducing the temperature rise inside the battery. Incorporation of graphene to the hydrocarbon-based phase change material allows one to increase its thermal conductivity by more than two orders of magnitude while preserving its latent heat storage ability. A combination of the sensible and latent heat storage together with the improved heat conduction outside of the battery pack leads to a significant decrease in the temperature rise inside a typical Li-ion battery pack. The described combined heat storage–heat conduction approach can lead to a transformative change in thermal management of Li-ion and other types of batteries.