A battery management system is the electronics inside a lithium battery that keeps it inside its safe operating envelope. Every lithium product needs one; the difference between products is how good it is and what it will tell you.
What a BMS does:
- Monitors individual cell voltages and balances them, so no cell is over- or under-charged relative to the others
- Over-voltage and under-voltage protection at cell and pack level
- Over-current and short-circuit protection
- Over-temperature and under-temperature protection, including charge inhibit below 0 °C
- State of charge and state of health estimation
- Contactor or MOSFET control, the BMS can physically open the circuit
- Event logging, pre-charge and inrush management, parallel current sharing
- Communications and a firmware update path
A distinction worth being clear about, because the terms get used interchangeably and mean different things: a BMS is inside the battery and protects the battery. A battery monitoring system is external, watches a bank, typically lead-acid, and reports its condition for maintenance planning. A lithium battery has a BMS. A VRLA bank does not which is why external monitoring is a separate product for lead-acid installations and an inherent feature for lithium.
Protection engineers raise one legitimate concern here: a BMS can open the DC circuit. Where the DC supply feeds protection and control, in a substation or a signalling location, the possibility of the battery removing itself from the bus has to be assessed against the protection scheme. That is a design conversation worth having early.