Electric vehicles frequently employ lithium-based batteries owing to their elevated energy density, long lifespan, and flexible design. Currently, research is concentrated on thermal safety, particularly in high power and dense packing applications. In addition to being vital for data management, equalization, temperature control, voltage and current estimation, and battery safety, performance, and durability, for equalization a battery thermal management system is also necessary. To obtain a balanced and effective thermal management solution, passive and active thermal management techniques address thermal challenges in various applications. This paper provides a review on temperature effect on battery performance and comprehensive comparison between passive and active thermal management techniques, with a specific focus on temperature equalization and state of charge equalization in battery systems. A passive approach is analysed using natural cooling methods to equalise temperatures in a system by directly contacting heat- generating components, allowing them to absorb heat efficiently. Similarly, an active approach is analysed by circulating air by fan to remove heat from hotspots and distribute it more evenly throughout the system. The weakest cell can frequently achieve the highest voltage while utilizing the same current when extra energy is released from the cell with the highest level of charge using the passive balancing mechanism. On the other hand, the active balancing strategy reduces temperature gradients and prevents localized overheating by more uniformly distributing heat. Extra energy from the highest state of charge cell is dispersed using the active balancing approach, until all the cells are equal. Active strategy batteries outperform passive ones due to their superior balance and temperature-maintaining ability that is suitable for low-power systems. However, by combining the strengths of both approaches, these systems can achieve enhanced cooling performance, optimized energy efficiency, improved reliability, flexibility and cost-effectiveness, making them ideal for demanding thermal management in diverse environments.