Estimation algorithms to measure the actual performance of a lithium-ion battery are presented for real-time online monitoring. Capacity was selected as the representative variable indicating the performance of the battery. Three algorithms were suggested to estimate the degree of capacity fading: principal algorithm, supplementary algorithm, and hybridized algorithm. The principal algorithm was based on a simplified equivalent circuit model and a soft sensor technique. The soft sensor technique was based on a system identification methodology with moving horizon estimation. The supplementary algorithm was developed to compensate for the problem of computational load. Finally, both the algorithms were combined to develop a complementary hybridized algorithm. The suitability of the algorithms was demonstrated with real-time online monitoring of fresh and aged cells using cyclic experiments.