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The performance and reliability of lithium-ion batteries, which are crucial for electric vehicles (EVs) and battery energy storage systems (BESS), are fundamentally dependent on the quality of their cells and components. Despite stringent quality control, intrinsic factors cause cell-to-cell variations (CtCV) in capacity and internal resistance. This paper explores the effects of CtCV in multi-cell battery modules, on current distribution, heat generation and evolution of temperature. This study presents a multi-cell electro-thermal model considering individual cell behavior, and interactions between parallel-connected cells. The Monte Carlo simulation method is used to study the correlations between CtCV and its global impact on overall battery performance. Our findings show that CtCV causes significant variations in cell behavior, particularly at high discharge rates, negatively impacting overall system performance. The effect of the number of cells in parallel is studied. This research provides a comprehensive understanding of the impact of CtCV and offers practical solutions to improve design and manufacturing of large battery modules for EVs and renewable energy applications. • Impact of cell-to-cell variations (CtCV) on multi-cell battery module performance. • Monte Carlo simulations reveal CtCV causes performance variations at high discharge rates. • More parallel cells reduce capacity variations but increase heat and temperature spread. • Current, heat, and temperature correlate strongly with internal resistance and capacity. • Findings improve battery design, fault detection, and thermal management for EVs/BESSs.