This paper reports an in-depth mechanistic study on the oxidative decomposition of propylene carbonate in the presence of lithium salts (LiClO4, LiBF4, LiPF6, and LiAsF6) with the aid of density functional theory calculations at the B3LYP/6-311++G(d,p) level of theory. The solvent effect is accounted for by using the implicit solvation model with density method. Moreover, the rate constants for the decompositions of propylene carbonate have been investigated by using transition-state theory. The shortening of the original carbonyl C-O bond and a lengthening of the adjacent ethereal C-O bonds of propylene carbonate, which occurs as a result of oxidation, leads to the formation of acetone radical and CO2 as a primary oxidative decomposition product. The termination of the primary radical generates polycarbonate, acetone, diketone, 2-(ethan-1-ylium-1-yl)-4-methyl-1,3-dioxolan4-ylium, and CO2. The thermodynamic and kinetic data show that the major oxidative decomposition products of propylene carbonate are independent of the type of lithium salt. However, the decomposition rate constants of propylene carbonate are highly affected by the lithium salt type. On the basis of the rate constant calculations using transition-state theory, the order of gas volume generation is: [PC-ClO4](-) > [PC-BF4](-) > [PC-AsF6](-) > [PC-PF6](-).