Lithium-ion (Li-ion) batteries are widely considered an efficient energy source for different propulsion systems for ground, aerial, and space vehicles due to their high specific energy and power. Capacity fading of Li-ion batteries represents a significant increase in running costs of electrified powertrains and hence grasps the attention of many researchers to investigate and understand this process closely. This paper presents an experimental method for monitoring, evaluating, and assessment of the capacity degradation process in vehicular energy storage systems. To this aim, a test rig has been designed and set up to conduct a set of predefined charging and discharging cycles according to respective standards to capture the changes in current throughput and voltage per cycle. The analysis reveals valuable insights into the correlation between the rate of battery discharge current and the rate of capacity loss of Li-ion batteries. Moreover, such results are beneficial to develop accurate degradation models of the batteries using different machine learning techniques, to be used for mathematical modeling of electrified propulsion systems.