Li-ion batteries are employed to propel Electric vehicles (EVs) and Hybrid Electric Vehicles (HEVs) into a clean and sustainable future. A battery pack experiences high heat generation under extreme and abusive conditions, which may lead to catastrophic thermal runaway. The present study proposes an efficient and economical Phase Change Material (PCM) based Battery Thermal Management System (BTMS) to avoid thermal runaway. A 3D simulation is performed on a single battery (1P1S) and a battery pack consisting of six batteries stacked in series (1P6S), with and without PCM, using the multi-scale multi-dimensional Newman, Tiedemann, Gu, and Kim (NTGK) model in ANSYS. The NTGK model analyzes the battery pack's discharge behavior and thermal performance. For PCM-based BTMS, the NTGK is coupled with the solidification and melting model. The effect of ambient temperature, discharge rate, and convective heat transfer coefficient on 1P1S and 1P6S battery packs with and without PCM is investigated under extreme and abusive conditions. The ambient temperature (Tamb) significantly impacts PCM selection and battery performance. The effective Tamb – PCM combinations are proposed for the optimal working of the battery pack. Under the extreme conditions of the fast-discharging rate, the PCM-based BTMS reduces the maximum battery temperature by 25.3 K and 19.5 K and improves the temperature uniformity by 5.3 K and 3.6 K at 5C and 4C discharge rates, respectively. Also, at Tamb of 300 K, the proposed PCM-based BTMS significantly reduces the maximum temperature by 60.4 K, 46 K, and 29.3 K when the external shorting resistance is 0.10, 0.15, and 0.25 Ω, respectively. The proposed cooling system averts the thermal runaway when external shorting is 0.10 Ω, and internal shorting is >0.1 μΩ. This research will be helpful in the further development of PCM-based thermal management systems for large-scale and commercial applications.