Electric mobility decarbonizes the transportation sector and effectively addresses sustainable development goals. A good battery thermal management system (BTMS) is essential for the safe working of electric vehicles with lithium‐ion batteries (LIBs) to address thermal runaway and associated catastrophic hazards effectively. However, PCMs suffer from low thermal conductivity issues, and hence, enhancement techniques include the use of fins, nano‐additives, extended graphite powder, and so forth. The use of composite phase change materials effectively addresses LIB thermal management widely used in electric vehicles while mitigating thermal runaway, besides providing flame retardancy, thermal/mechanical stability, and electrical insulation, and preventing leakage. It is noted that no single strategy of BTMS is brought down to a safe zone of temperature, and hybrid BTMSs are being employed, invariably involve phase change materials (PCMs) to a large extent. It is essential to utilize CPCMs to address the effects of low‐temperature environments and vibrations considering vehicle driving cycles and operating conditions. It is observed from the review that ultrasonic monitoring and early detection of internal short circuits are the steps towards mitigation of thermal runaway propagation. It is required to utilize optimization methods, machine learning and IoT tools for a feasible PCM based BTMS work. Present review briefly describes potential methods for effective utilization of PCMs, comparison among different methods, challenges associated and potential solutions. It is highly essential to develop compact and economical BTMS with effective CPCMs for better and safer LIB operation to attract large‐scale commercialization of electric vehicles.