Accurate estimation of lithium-ion battery health will (a) improve the performance and lifespan of battery packs in electric vehicles, spurring higher adoption rates, (b) determine the actual extent of battery degradation during usage, enabling a health-conscious control, and (c) assess the available battery life upon retiring of the vehicle to re-purpose the batteries for ''second-use'' applications. In this paper, the real-time validation of an advanced battery health estimation algorithm is demonstrated via electrochemistry, control theory, and batteryin-the-loop (BIL) experiments. The algorithm is an adaptive interconnected sliding mode observer, based on a battery electrochemical model, which simultaneously estimates the critical variables such as the state of charge (SOC) and state of health (SOH). The BIL experimental results demonstrate that the SOC/SOH estimates from the observer converge to an error of 2% with respect to their true values, in the face of incorrect initialization and sensor signal corruption.