Lithium-Ion Batteries (LIBs) usually present several degradation processes, which include their complex Solid-Electrolyte Interphase (SEI) formation process, which can result in mechanical, thermal, and chemical failures. The SEI layer is a protective layer that forms on the anode surface. The SEI layer allows the movement of lithium ions while blocking electrons, which is necessary to prevent short circuits in the battery and ensure safe operation. However, the SEI formation mechanisms reduce battery capacity and power as they consume electrolyte species, resulting in irreversible material loss. Furthermore, it is important to understand the degradation reactions of the LIBs used in Electric Vehicles (EVs), aiming to establish the battery lifespan, predict and minimise material losses, and establish an adequate time for replacement. Moreover, LIBs applied in EVs suffer from two main categories of degradation, which are, specifically, calendar degradation and cycling degradation. There are several studies about battery degradation available in the literature, including different degradation phenomena, but the degradation mechanisms of large-format LIBs have rarely been investigated. Therefore, this review aims to present a systematic review of the existing literature about LIB degradation, providing insight into the complex parameters that affect battery degradation mechanisms. Furthermore, this review has investigated the influence of time, C-rate, depth of discharge, working voltage window, thermal and mechanical stresses, and side reactions in the degradation of LIBs.