Understanding lithium-ion battery degradation is critical to unlocking their full potential. Poor understanding leads to reduced energy and power density due to over-engineering, or conversely to increased safety risks and failure rates. Thermal management is necessary for all large battery packs, yet experimental studies have shown that the effect of thermal management on degradation is not understood sufficiently. Here we investigated the effect of thermal gradients on inhomogeneous degradation using a validated three-dimensional electro-thermal-degradation model. We have reproduced the effect of thermal gradients on degradation by running a distributed model over hundreds of cycles within hours and reproduced the positive feedback mechanism responsible for the accelerated rate of degradation. Thermal gradients of just 3 °C within the active region of a cell produced sufficient positive feedback to accelerate battery degradation by 300%. Here we show that the effects of inhomogeneous temperature and currents on degradation cannot and should not be ignored. Most attempts to reproduce realistic cell level degradation based upon a lumped model (i.e. no thermal gradients) have suffered from significant overfitting, leading to incorrect conclusions on the rate of degradation.