Recent work on multifunctional materials has demonstrated that high-strength composites could be integrated with active Li-ion battery material to create high strength and high energy density storage structures that could meet the transportation requirements on mobility and energy storage density. However, the performance and the design of the multifunctional materials require fundamental understanding of the mechanical behavior of the integrated Multifunctional Energy Storage (MES) Composites systems under various loading conditions. Characterization of this new class of multifunctional materials would become very challenging without an adequate simulation model to guide the tests and validate the results. Therefore, this work presents the mechanical simulation and design of the MES Composites system that consists of multiple thin battery layers, polymer reinforcements, and carbon fiber composites, which results significant challenges in simulation and modeling. To tackle these issues, homogenization techniques were adopted to characterize the multi-layer properties of battery material with physics-based constitutive equations combined with non-linear deformation theories to handle the interface between the battery layers. Second, both mechanical and electrical damage and failure modes among battery materials, polymer reinforcements and carbon fiberpolymer interfaces were characterized through appropriate models and experiments. The model of MES Composite has been implemented in a commercial finite element code. A comparison of structural response and failure modes from numerical simulations and experimental tests will be presented in the paper. The simulated strain distribution and its application to Structural Health Monitoring (SHM) on MES Composites will also be discussed. The results of the study showed that the predictions of elastic and damage responses of MES Composites at various loading condition agreed with the test data. With appropriate material parameters determined from experiments, this multi-physics model can be used as a necessary tool to characterize a failure envelop that governs the design of MES Composites under specified electrical and mechanical loads.