Abstract: Long-term storage for lithium-ion batteries is possible in practical applications, and their performance may degrade after long-term storage. To investigate the effect of storage conditions on battery performance degradation and failure mechanism, a 20 Ah LiFePO₄ pouch cell was used as the object. The degradation changes of battery performance under different temperatures and SOC states were investigated, and the failure mechanism was analyzed through positive and negative electrode sheets testing characterization. The research results show that as the storage time prolongs, the battery capacity decreases and the DCR internal resistance increases. At high temperature and high SOC storage, the battery capacity fades significantly faster. At high temperature storage, the DCR internal resistance increases faster, and the power output capacity of the battery decreases. The test results of a single-layer cell show that the irreversible loss of active lithium is the leading cause of storage capacity fade. SEM, XRD, and XPS were used to analyze and characterize the electrode before and after storage, including surface morphology, crystal structure, and surface components. The SEM and XPS test results show that after long-term, storage, the negative electrode surface exhibits a distinct sediment layer formation, which is deposited on the surface of the negative electrode sheet and comes from the repair and reorganization of the SEI film. The repair of SEI consumes active lithium, resulting in capacity fade. From the XPS spectrum of the negative electrode, it can be seen that the peak intensity of LiF and other lithium salts significantly increases, indicating that by-products of electrolyte reactions are on the surface of the negative electrode, which is consistent with the results of SEM. A large amount of elemental iron is also detected on the negative electrode XPS spectrum, indicating that the iron dissolution reaction occurs during the storage of the LiFePO₄ electrode. Then, iron ions deposit on the surface of the negative electrode during charge and are reduced to elemental iron. These iron impurities will destroy the SEI on the negative electrode surface and accelerate the consumption of active lithium.