Lithium-ion battery devices are essential for energy storage and supply in distributed energy generation systems. Robust battery management systems (BMSs) must guarantee that batteries work within a safe range and avoid the damage caused by overcharge and overdischarge. The state-of-charge (SoC) of Li-ion batteries is difficult to observe after batteries are manufactured. The hysteresis phenomenon influences the existing battery modeling and SoC estimation accuracy. This research applies a terminal sliding mode observer (TSMO) algorithm based on a hysteresis resistor-capacitor (RC) equivalent circuit model to enable accurate SoC estimation. The proposed method is evaluated using two dynamic battery tests: the dynamic street test (DST) and the federal urban driving schedule (FUDS) test. The simulation results show that the proposed method achieved high estimation accuracy and fast response speed. Additionally, real-time battery information, including battery output voltage and SoC, was acquired and displayed by an automatic monitoring system. The designed system is valuable for all battery application cases.