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An electrochemical‐thermal model is developed to simulate the capacity fade of a lithium‐ion battery. Capacity fade is based on the loss of active lithium ions and the solid electrolyte interface (SEI) increase in an anode film caused by solvent reduction at the anode–electrolyte interface. This model incorporates a solvent reduction reaction at the anode. The reliability of the model is verified in terms of electrochemical properties, thermal properties, and capacity fade. Quantitative analysis is conducted to study the evolution of the distribution of the side‐reaction rate in the electrode thickness direction with the charging time. Moreover, the effect of temperature change on the current density of side‐reactions is also considered. The results indicate that during high‐rate charge and discharge cycles, the temperature of a lithium‐ion power battery increases significantly, and the temperature effect improves the accuracy of the model prediction.