Because of their numerous advantages, lithium-ion (Li-ion) batteries have recently become a focus of research interest for vehicle applications. Li-ion batteries are suitable for electric vehicles (EVs) and hybrid electric vehicles (HEVs) because of advantages such as their high specific energy, high energy density, and low self-discharge rate in comparison with other secondary batteries. Nevertheless, the commercial availability of Li-ion batteries for vehicle applications has been hindered by issues of safety, cost, charging time, and recycling. One principal limitation of this technology resides in its poor low-temperature performance. Indeed, the effects of low temperature reduce the battery’s available energy and increase its internal impedance. In addition, performance-hampering cell degradation also occurs at low temperatures and throughout the entire life of a Li-ion battery. All of these issues pose major difficulties for cold-climate countries. This paper reviews the effects of cold temperatures on the capacity/power fade of Li-ion battery technology. Extensive attention is paid to the aging mechanisms of Li-ion batteries at cold temperatures. This paper also reviews several battery models found in the literature. Finally, thermal strategies are detailed, along with a discussion of the ideal approach to cold-temperature operation.