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This paper proposes a practical capacity fading model for Li-ion cells based on real operating conditions in electric vehicles (EVs). Numerous LiFePO4 cells have been cycled with a current profile containing regenerative braking to determine the capacity fading rate. The cells have been cycled at different temperatures with different initial state of charges, depth of discharges, or C-rates. From the experiments, an empirical model is constructed, which is capable of modeling the capacity fading in EV battery cells under most operating conditions. The capacity fading model can be used to estimate the state of health of EV battery cells, and simple ways to optimize the battery lifetime are proposed.