With the advent of hybrid and electric cars battery monitoring systems and battery management systems have become bundled with more and more sophisticated algorithms and specifications. The validation of these systems are a head ache for OEMs and Tier ones considering the massive battery, high voltage and the current involved with the real loads directly or in directly connected to them. This paper is aimed at providing an intuitive explanation of these challenges and solutions which employ HILS for the component level validation of the above units. . Conventional validation for these systems produce test results much later in the embedded product development life cycle which calls for an additional over head of cost, resource, time and effort. A Proposed solution is to find the accuracy of SOC, SOH estimation algorithm in the battery monitoring sensor which usually will be clamped to the real battery itself. This paper uses physical measurement methods to estimate the SOC and SOH and compare it with the value reported by ECU. The HILS test bench makes use of real battery, a programmable DC power supply to charge the battery at required rates, a DC Electronic load to discharge the battery at required currents, a programmable temperature chamber to enclose the entire test setup, a HILS simulator with relevant IO cards and protocol simulations, algorithms in simulator to control all these hardware counter parts and a test automation tool. The Test bench has the battery management ECU also connected to it, which decides when to charge or discharge the battery. This solution is proven to be more cost efficient and productive as compared to the validation where battery is emulated.