The cycling performance of low-cost LiFePO4-based high-power lithium-ion cells was investigated and the components were analyzed after cycling to determine capacity fade mechanisms. Pouch type LiFePO4/natural graphite cells were assembled and evaluated by constant C/2 cycling, pulse-power and impedance measurements. From post-test electrochemical analysis after cycling, active materials, LiFePO4 and natural graphite, showed no degradation structurally or electrochemically. The main reasons for the capacity fade of cell were lithium inventory loss by side reaction and possible lithium deposition on the anode.