Equivalent circuit model (ECM) is a practical and commonly used tool not only in state of charge (SOC) estimation but also in state of health (SOH) monitoring for lithium-ion batteries (LIBs). The functional forms of circuit parameters with respect to SOC in ECM are usually empirical determined, which cannot guarantee to obtain a compact and simple model. A systematical solution framework for simultaneous functional form selection and parameter estimation is proposed. A bi-objective mixed-integer nonlinear programming (MINLP) model is first constructed. Two solution approaches, namely the explicit and implicit methods, are then developed to balance model accuracy and model complexity. The former explicitly treats the model complexity as a constraint and the latter implicitly embeds the model complexity into the objective as a penalty. Both approaches require sequential solution of the transformed MINLP model and an ideal and nadir ideal solutions-based criterion is utilized to terminate the solution procedure for determining the optimal functional forms, in which ideal solution and nadir ideal solution represent the best and worst of each objective, respectively. Both explicit and implicit approaches are thoroughly evaluated and compared through experimental pulse current discharge test and hybrid pulse power characterization test of a commercial LIB. The fitting and prediction results illustrate that the proposed methods can effectively construct an optimal ECM with minimum complexity and prescribed precision requirement. It is thus indicated that the proposed MINLP-based solution framework, which could automatically guide the optimal ECM construction procedure, can be greatly helpful to both SOC estimation and SOH monitoring for LIBs. (C) 2015 American Institute of Chemical Engineers