A method and a system are provided for optimizing battery usage of an electronic device. The method comprises determining, by a battery optimization unit, a degree of criticality of environment in which one or more sensors are operating based on one or more pre-defined conditions. The method further comprises determining, by the battery optimization unit, a plurality of parameters comprising an energy level of the electronic device, an available processing power, and an available communication network bandwidth associated with the electronic device. The method further comprises processing, by the battery optimization unit, a first portion of sensor data locally based on the degree of criticality of environment and a priority based rule engine, wherein the priority based rule engine is configured to optimize battery usage of the electronic device based on the plurality of parameters.