This paper focuses on the development of a plug‐in hybrid vehicle (PHEV) full‐vehicle transient thermal model in thermal modelling software to predict the battery surface temperature at various locations. The full‐vehicle thermal model consists of a full exhaust piping system, a high‐voltage lithium‐ion battery pack system, and a battery liquid coolant system. All modes of heat transfer including conduction, forced and natural convection, radiation from the exhaust system, battery cooling, and battery internal heat generation are considered in the model. The full‐vehicle model is simulated under various vehicle conditions to represent four standard customer drive cycles. The simulated battery surface temperature at specified points along the battery module surfaces is compared to experimental vehicle test‐cell data to provide model validation. Using the results from the transient thermal simulations, prediction of the battery thermal degradation is performed throughout the entire vehicle lifecycle. The thermal degradation is estimated using thermal goals and equivalent exposure times.