With the development of intelligent vehicles, increasing number of electronic and electrical devices are applied in vehicles, the necessary power is surging, battery protection is increasingly required, and higher demands are made for energy management. Most previous studies on battery characteristics have only focused on the battery itself, which is chemical characteristics. Further considering battery’s actual operating conditions on vehicles, battery’s functional characteristics are proposed and studied in this paper. Aging adaptive functional state model of battery for internal combustion engine vehicles is proposed, comprehensively revealing the operating characteristics covering the battery full life cycle. Thereafter, based on the model, a battery protection scheme is developed, including over-discharge and graded over-current protection to achieve comprehensive battery protection. Furthermore, a model-based energy management strategy is presented to achieve integrated optimization of fuel economy, battery protection, and vehicle power performance. Finally, tests are performed on the vehicle and test bench to verify the validity and feasibility of the proposed model and management scheme. Results reveal that the model can reflect battery’s functional features, over-current protection and over-discharge protection of the battery are achieved, and the vehicle start-up capability is secured. The proposed energy management strategy can effectively improve fuel economy.