The ongoing shift towards a sustainable transportation sector is a hot topic. Lithiumion battery technology has become a key element in electrification due to its highenergy density and favourable electrical properties. The non-measurable chargeandhealth states of a battery are desirable to estimate for safety, performanceand economic reasons. Alelion Energy Systems AB is looking to improve thestate of health estimation method for their battery systems and this thesis providesa decision basis in the form of a literature study, comparison, developmentand validation of methods. The outcome of the work is a recommendation of aself-developed estimation method named the slope defined capacity trend analysismethod. To estimate the state of health (remaining capacity of the cell), themethod takes advantage of changes in the polarization curve during charging asthe battery cell ages. Alelion is intending to implement the patent pending slopedefined capacity trend analysis method.