Decoupling the temperature effect on the on-state voltage (Vce) is essential when the bond wire degradation needs to be characterized in the power cycling test. Existing studies empirically adopt a fixed temperature coefficient without fully addressing the corresponding theoretical support and lacking the error analysis. This digest examines the influence of degradation on the temperature-dependence characteristics of Vce under two typical currents, the thermal sensing current and the power cycling current. Moreover, the error associated with the current decoupling strategy is quantified and evaluated. Based on this, an error-tolerance-based Vce decoupling scheme is proposed. The effectiveness of the analysis above is validated based on an elaborate experiment design.