This paper investigates the application of nanofluids in lithium-ion battery (LIB) thermal management through a comprehensive review of thermal management system (TMS) development. The review focuses on systems incorporating both phase change materials (PCMs) and nanofluid technologies as solutions for managing heat generation and thermal hazards in LIBs. It demonstrates that traditional cooling techniques, such as air and liquid cooling, are less effective than nanofluids. These colloidal suspensions of nanoparticles (e.g. Al2O3, CuO, TiO2, AgO, as well as carbon-based nanomaterials) in base fluids enhance both thermal conductivity and convective heat transfer performance. The review demonstrats that using Al2O3-water nanofluids with a 2% volume fraction can reduce peak temperatures by 1.2°C, while hybrid nanofluids containing Al2O3-CuO can reduce temperatures by up to 54.23% at a 0.5% concentration. When PCMs are combined with nanofluids to form hybrid systems, maximum temperature reduction of up to 19.5% has been observed. These hybrid systems also contribute to greater thermal uniformity and delayed temperature increases. However, challenges such as nanoparticle stability, increased pressure drops, and environmental and economic concerns remain significant obstacles. This review concludes that TMSs using nanofluids in conjunction with PCMs within optimised channel designs show promising potential for enhancing LIB performance, though further research is needed to overcome the associated barriers.