The oxidation induced reactions of the common lithium battery electrolyte solvent ethylene carbonate (EC) have been investigated for EC2 using density functional theory and for selected reaction paths using Møller–Plesset perturbation theory (MP4). The importance of explicitly treating at least one solvent molecule interacting with EC during oxidation (removal of an electron) on the EC oxidation potential and decomposition reactions was shown by comparing oxidation of EC and EC2. Accuracy of DFT results was evaluated by comparing with MP4 and G4 values for oxidation of EC. The polarized continuum model (PCM) was used to implicitly include the rest of the surrounding solvent. The oxidation potentials of EC2 and EC4 were found to be significantly lower than the intrinsic oxidation potential of an isolated EC and also lower than the oxidation potential of EC–BF4−. The exothermic proton abstraction from the ethylene group of EC by the carbonyl group of another EC was responsible for the decreased oxidative stability of EC2 and EC4 compared to EC. The most exothermic path with the smallest barrier for EC2 oxidation yielded CO2 and an ethanol radical cation. The reaction paths with the higher barrier yielded oligo(ethylene carbonate) suggesting a pathway for the experimentally observed poly(ethylene carbonate) formation of EC-based electrolytes at cathode surfaces.