The effect of varying separator membrane physical parameters such as degree of porosity, tortuosity and thickness, on battery delivered capacity was studied in order to optimize performance of lithium-ion batteries. This was achieved by a theoretical mathematical model relating the Bruggeman coefficient with the degree of porosity and tortuosity. The inclusion of the separator membrane in the simulation model of the battery system does not affect the delivered capacity of the battery. The ionic conductivity of the separator and consequently the delivered capacity values obtained at different discharge rates depend on the value of the Bruggeman coefficient, which is related with the degree of porosity and tortuosity of the membrane. Independently of scan rate, the optimal value of the degree of porosity is above 50% and the separator thickness should range between 1μm and 32μm for improved battery performance.