The degradation mechanisms of lithium iron phosphate battery have been analyzed with 150 day calendar capacity loss tests and 3,000 cycle capacity loss tests to identify the operation method to maximize the battery life for electric vehicles. Both test results indicated that capacity loss increased under higher temperature and SOC conditions. And also, large increase of internal resistance on the high temperature and high SOC conditions was confirmed by AC impedance tests. The real cycle capacity loss characteristic was derived by subtracting the capacity decrease due to calendar capacity loss during the cycle test from the overall capacity loss characteristic obtained from the cycle test. As a result, it is found that the real capacity loss contains not only structural disorders of electrode but also degradation factors due to the chemical reactions. Characteristics of degradation were quantified with equations based on the chemical kinetics. With this degradation prediction, an operation method was proposed that is compatible with the long life of batteries and the safety driving of a vehicle. As a result, with optimizing the SOC range used in the operation as follows: 30-10% in the warm seasons, 45-25% in the cold seasons, it was found that batteries can last 4 times longer than it used with high SOC range in every season.