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Within the last decade, the automotive industry has made major progress toward the electrification of drive trains and application of electrochemical power sources. Among available storage solutions, Li-ion batteries are considered as the most attractive and are set to be used in the next generation of hybrid and electric vehicles. This is due to their superiority in energy density, power density, and low self-discharge and high cycle life compared to other chemistries. However, there are some limitations associated with Li-ion battery; among them is the operating temperature range. Any deviation from a narrow temperature range may result in low overall performance and potential degradation of the cells. In this paper, impact of ambient temperature on the A123 Li-ion batteries performance is investigated. A123 cells have been tested under constant charge-discharge cycles, hybrid pulse power characterization (HPPC) tests and also standard drive cycle tests.