Reliability of power electronics modules is of paramount importance for the commercial success of various types of electric vehicles. In this paper, we study the technical feasibility of detecting early symptoms and warning signs of power module degradation due to thermomechanical stress and fatigue, and developing a prognostic system that monitors the state of health of the power modules in electric, hybrid, and fuel cell vehicles. A signature degradation trace of the on-voltage of IGBT modules was observed from accelerated power cycling test. This on-voltage "anomaly" can be attributed to sequential events of solder joint degradation followed by wirebond lift-off mechanisms. A quasi real-time IGBT failure prognostic algorithm based on monitoring the abnormal VCEsat variation at specific currents and temperatures is developed. The algorithm was verified using extensive SIMULINK modeling. The prognostic system can be implemented cost-effectively in existing vehicle hardware/software architectures