In recent years, in order to reduce vehicle exhaust emissions and alleviate the energy crisis, new energy vehicles have been rapidly developed. With the improvement of the performance and driving range of electric vehicles, the power and capacity of lithium batteries are increasing, and their safety and reliability are becoming increasingly important. The micro fuzziness, evolution complexity and actual variability of lithium battery performance make it difficult to characterize its aging, and the estimation deviation of its state of health (SOH) is large. It is urgent to deeply explore the mechanism of internal capacity decline and establish a reasonable mathematical model to realize the quantitative evaluation of microscopic reaction process. In this work, the aging factors of lithium batteries are classified, and the influence of positive and negative aging of battery on lithium battery is analyzed. The aging mechanism of lithium battery is divided into the loss of active lithium ion (LLI), the loss of active material (LAM) and the increase of internal resistance. The failure mechanism of positive and negative electrode materials, electrolyte and current collectors during battery aging is systematically analyzed. Considering the actual operating conditions of lithium battery, the external aging factors are clarified. The main mathematical models of capacity decline and SOH prediction are summarized. This work can provide reference for the construction of aging model, SOH prediction model, and provide theoretical basis for the design of lithium battery management system.