A method for adapting a usage level of a battery pack includes measuring cell sense data for each respective battery cell using a cell sense circuit, the cell sense data including a cell voltage, current, and temperature. The method includes processing the cell sense data, for each respective battery cell, through multiple battery state functions of a controller to generate numeric cell degradation values (CDVs). The battery state functions are calibrated relationships of the cell sense data to predetermined battery fault conditions. Thereafter, the method includes automatically adapting the usage level of the battery pack during operation of the battery pack, via the controller, based on the numeric CDVs. An electric powertrain system includes the battery pack, cell sense circuit, a rotary electric machine, and a controller configured to execute the above method.