Formation is an essential process in the manufacturing of lithium-ion batteries and determines the performance of batteries, including life time, rate capability and so forth. The core of formation is to form a stable solid electrolyte interphase (SEI), which profoundly influences interfacial reactions and ion transport within Li-ion batteries, on the surface of electrode. It is crucial to fully and deeply understand the intricate structure and evolution of SEI, which remains largely uncharted. This paper aims to systematically analyze SEI thermodynamics, encompassing energy distribution, entropy dynamics during SEI formation, and enthalpy changes. SEI evolves towards an equilibrium state, maximizing entropy. The intricate relationship between SEI thermodynamics and battery performance is established by dissecting the impacts of temperature and current density on SEI thermodynamic parameters and battery characteristics. Elevated temperatures and higher current densities foster the development of a more porous and high-entropy outer SEI layer, rendering organic SEI constituents prone to decompose into high-energy gases and low-energy inorganic compounds. Notably, a fast formation strategy within a high state-of-charge range offers a potential solution to high quality SEI. This review strives to bridge the divide between fundamental thermodynamics and practical battery performance, ultimately contributing to the advancement of battery manufacturing.