The battery state of charge (SOC) and state of power (SOP) are two essential parameters in the battery management system. For power lithium-ion batteries, temperature variation and the hysteresis effect are two of the main negative contributions to the accuracy of model-based SOC and SOP estimation. Thereby, a reliable circuit model is established herein to accurately estimate the working state of batteries. Considering the effect that temperature and hysteresis have on the electrical system, a unique fully-coupled temperature–hysteresis model is proposed to describe the interrelationship among capacity, hysteresis voltage, and temperature comprehensively. The key parameters of the proposed model are identified by experiments operated on lithium-ion batteries under varying ambient temperatures. Then we build a multi-state joint estimator to calculate the SOC and SOP on the basis of the temperature–hysteresis model. The effectiveness of the advanced model is verified by experiments at different temperatures. Moreover, the proposed joint estimator is verified by the improved dynamic stress test. The experimental results indicate that the proposed estimator making use of the temperature–hysteresis model can estimate SOC and SOP accurately and robustly. Our results also prove invaluable in terms of the construction of a flexible battery management system for applications in the actual industrial field.