A novel thermal-management system that incorporates phase-change material (PCM) is proposed and investigated for electric vehicle (EV) applications. A commercial finite-element (FE) software, PDEase2D(TM), was used to simulate the thermal behavior of EV battery modules with a PCM thermal management system. Simulation results show that the temperature profile of the cells integrated in the module design was substantially more uniform during discharge at different rates than without PCM. The PCM system is effective in thermally sensitive batteries such as Li-ion and most Li-polymer batteries with a significant reversible heat effect. The heat generated during discharge and stored as latent heat is then largely utilized during charge, and a smaller part of it is transferred to the surroundings. The stored heat will be rejected to the module when the battery is left to relax or when its temperature drops below the melting point of the PCM. This is an important advantage for EV operation under cold conditions or in space applications where the battery temperature drops significantly when an orbiting satellite moves from the light to the dark side of the earth.