Over the last few decades, lithium-ion (Li-ion) batteries have attracted significant attention due to their high energy density, low maintenance, and the variety of shapes, chemistries and performances available. Meanwhile, reliability and safety assessment of Li-ion batteries has become an important issue for original equipment manufacturers, in particular for future electric vehicles’ performance. Evaluation of reliability and safety plays an important role to assess overall Li-ion battery behavior over its lifespan. This paper presents the role, mechanism and outcome of the different failures for evaluating reliability and safety of Li-ion batteries in electric vehicles. Additionally, the contribution of Li-ion battery degradation in five main failure modes and capacity and power fade for providing reliability assessment models as solutions of existing challenges have been investigated.