Electric vehicles (EVs) are increasingly being used today, but the safety of their battery system remains an issue. Therefore, a clear understanding of the degradation mechanism of EV batteries has become a pressing issue. In this study, the EIS characterization and internal morphological changes are investigated during degradation process of 18,650 LIBs. The research results show that the EIS value of LIBs changes to varying degrees with battery degradation, but this change is not only due to the ageing of LIB materials, but also related to the LIB's state of charge. In lithium-ion battery EIS, the ohmic impedance is mainly influenced by the SOH, while the transfer impedance and extended impedance are influenced by the SOC of the battery. In addition, as the aging process progresses, the particles of the anode and cathode materials of the LIB gradually become smaller and more fragmented, the decomposition on the surface of the negative electrode becomes more significant, which is mainly due to the fact that the decomposition of the graphite negative electrode is more pronounced, which evidenced by scanning electron microscopy (SEM) images. These new finds will help further improve the design and management of LIBs.