Electric vehicles (EVs) have garnered significant attention as a vital driver of economic growth and environmental sustainability. Nevertheless, ensuring the safety of high-energy batteries is now a top priority that cannot be overlooked during large-scale applications. This paper proposes an innovative active protection and cooling integrated battery module using smart materials, magneto-sensitive shear thickening fluid (MSTF), which is specifically designed to address safety threats posed by lithium-ion batteries (LIBs) exposed to harsh mechanical and environmental conditions. The theoretical framework introduces a novel approach for harnessing the smoothed-particle hydrodynamics (SPH) methodology that incorporates the intricate interplay of non-Newtonian fluid behavior, capturing the fluid-structure coupling inherent to the MSTF. This approach is further advanced by adopting an enhanced Herschel-Bulkley (H-B) model to encapsulate the intricate rheology of the MSTF under the influence of the magnetorheological effect (MRE) and shear thickening (ST) behavior. Numerical simulation results show that in the case of cooling, the MSTF is an effective cooling medium for rapidly reducing the temperature. In terms of mechanical abuse, the MSTF solidifies through actively applying the magnetic field during mechanical compression and impact within the battery module, resulting in 66% and 61.7% reductions in the maximum stress within the battery jellyroll, and 31.1% and 23% reductions in the reaction force, respectively. This mechanism effectively lowers the risk of short-circuit failure. The groundbreaking concepts unveiled in this paper for active protection battery modules are anticipated to be a valuable technological breakthrough in the areas of EV safety and lightweight/integrated design.