In this paper a novel method for estimating state of charge (SOC) of lithium ion battery packs in battery electric vehicle (BEV), based on state of health (SOH) determination is presented. SOH provides information on aging of battery packs and it declines with repeated charging and discharging cycles of battery packs, so SOC estimation depends considerably on the value of SOH. Previously used SOC estimation methods are not satisfactory as they haven’t given enough attention to the decline of SOH. Therefore a novel SOC estimation method based on SOH determination is introduced in this paper; trying to compensate the deficiency for lack of attention to SOH. Real time road data are used to compare the performance of the conventionally often used Ah counting method which doesn’t give any consideration to SOH with the performance of the proposed SOC estimation method, and better results are obtained by the proposed method in comparison with the conventional method.