With the continuous improvement of the energy density and charge/discharge rate of battery systems, the resulting temperature rise caused by heat generation has become more and more severe. It poses a great challenge to achieving efficient and cost-effective thermal management. This study presents a novel and compact thermal management system for lithium-ion batteries that uses immersed evaporation method. The system immerses the cells in anhydrous acetone with a low saturation temperature, which allows the convection and evaporation of acetone to conduct and absorb heat generated by the cells. An electric-thermal coupled model of the lithium-ion cell was built to obtain its heat generation and temperature distribution during discharge. An evaporation model of the acetone was developed to obtain its mass change and temperature change during evaporation. The performance and design of the battery thermal management system were then explored and discussed. It was found that the immersed evaporation method could significantly reduce the maximum temperature of the cell surface at the discharging current three times the cell's rated capacity compared with the natural cooling method. By inverting the cells, the evaporation amount of the coolant was significantly increased, which further reduced the maximum temperature. The disturbing effect of the tabs on the vapor and the possible corrosion of the tabs by the vapor were also avoided. Based on this scheme, the effect of the latent heat, specific heat capacity, viscosity, thermal conductivity and evaporation coefficient of the coolant on the performance of the thermal management system was further investigated, which provides a qualitative basis for the design and optimization of the system. The impact degrees and optimal levels of the above parameters were then determined quantitatively through orthogonal experiments and range analysis. The novelty, advantage, substitutability, reliability, cost, feasibility, environmental impact, and limitation of the proposed battery thermal management system were discussed at the end.