Heat dissipation of lithium‐ion cells during its operation is critical for its performance. This study investigates the thermal behavior of a Li‐ion battery module (7.8 Ah, 11.1 V) under varying discharge rates (C‐rate) (0.91 to 1.45C) using experimental and numerical methods. Under natural convection at 1.45C C‐rate and 27°C ambient temperature, the module reaches 55.2°C, exceeding safe operational limits. Forced convection (FC) with inlet velocities of 0.4 and 0.7 ms −1 reduces the temperature to 40.8 and 37.7°C, respectively, though it causes temperature nonuniformity. To address these limitations, passive cooling with phase change material (PCM) was explored. PCM lowered the maximum temperature to 39.8°C with improved temperature uniformity (Δ T = 3.1°C). Further enhancement using expanded graphite increased PCM's thermal conductivity, maintaining low and uniform temperatures. Numerical simulations, validated against experimental results, were conducted to analyze heat transfer mechanisms under extreme C‐rates up to 5C and hot ambient temperatures up to 45°C. The findings demonstrate that while FC effectively cools lithium‐ion modules, it may reduce cell performance due to uneven temperature distribution. In contrast, PCM‐based passive cooling offers better temperature uniformity, though it is limited by low thermal conductivity, which can be mitigated by incorporating EG.