We use a high-gain adaptive observer and a trend filtering algorithm to detect early stages that lead to terminal voltage collapses in Li-ion batteries. This approach allows accurate detection without having sophisticated battery models. Theoretical analysis proves that the physical Li-ion battery becomes unstable when the estimated states of the observer enter instability. The trend filtering algorithm is able to detect such instability under large perturbations from the discharge current. Extensive simulation and experimental results demonstrate the effectiveness of the algorithms and its robustness under realistic perturbations. (C) 2013 Elsevier Ltd. All rights reserved.