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Causes of Lithium-Ion Battery Capacity Degradation — Technical Insights from EverExceed Lithium Battery Solutions
26 Dec 2025

A lithium-ion power battery is a highly complex electrochemical system composed of cathode and anode materials, current collectors, electrolyte, and separator. Under ideal conditions, only the reversible intercalation and de-intercalation of lithium ions occur between the electrodes, without any parasitic reactions. In this case, lithium ions are not consumed, and the battery capacity remains stable.

However, in real-world applications, side reactions inevitably occur in addition to lithium-ion intercalation processes. These side reactions lead to the consumption of active materials, loss of lithium ions, and electrolyte decomposition, ultimately resulting in lithium-ion battery capacity degradation and reduced service life.

With over 20 years of experience in industrial lithium batteries, power lithium batteries, and energy storage battery systems, EverExceed continuously optimizes materials, structure design, and intelligent BMS technology to effectively slow down battery degradation and extend the overall lifecycle.


Internal Causes of Lithium Battery Capacity Fading

1. Electrode Degradation

During charge and discharge cycles, loss of active materials, structural changes in cathode materials, and degradation of current collectors can all lead to capacity reduction. Side reactions may cause electrode material decomposition, while repeated lithium-ion insertion and extraction induce volume expansion and phase transitions in cathode materials. These changes hinder lithium-ion transport and reduce usable capacity.

EverExceed lithium-ion batteries adopt high-consistency electrode materials and optimized manufacturing processes, ensuring structural stability and long cycle life for applications such as UPS systems, data centers, and critical backup power.


2. Electrolyte Consumption

Side reactions during battery cycling continuously consume electrolyte components, reducing ionic conductivity and limiting electrochemical performance. Electrolyte degradation directly affects battery capacity, rate capability, and long-term reliability.

EverExceed utilizes high-stability electrolyte formulations and advanced sealing technology, making its lithium battery solutions suitable for energy storage systems (ESS), telecom power, and industrial backup applications.


3. SEI Layer Formation and Evolution

At the early stage of battery life, the electrolyte reacts with the electrode surface to form a solid electrolyte interphase (SEI layer). This SEI layer is chemically stable and prevents further direct reactions between the electrode and electrolyte, while still allowing lithium ions to pass through.

However, mechanical stress during repeated cycling can cause SEI layer cracking and regeneration. The continuous formation and repair of the SEI layer consume lithium ions and electrolyte, which is one of the key mechanisms of lithium battery capacity fading.

EverExceed integrates an intelligent Battery Management System (BMS) to precisely control charge and discharge parameters, effectively reducing SEI degradation caused by overcharge, over-discharge, and extreme operating conditions.


4. Separator Aging

The separator plays a critical role in isolating the cathode and anode to prevent internal short circuits. Ideally, the separator remains stable throughout battery operation. However, electrolyte decomposition caused by side reactions can deteriorate the electrochemical and mechanical properties of the separator, increasing internal resistance and accelerating capacity loss.

EverExceed lithium batteries employ high-temperature-resistant and safety-enhanced separator materials, compliant with international standards such as IEC, UL, and UN38.3.


External Factors Affecting Lithium Battery Capacity

1. Self-Discharge and Deep Charge/Discharge

Lithium-ion batteries experience gradual self-discharge during storage due to internal chemical reactions. These reactions consume lithium ions and generate insoluble by-products on electrode surfaces, hindering lithium-ion intercalation.

Similarly, deep discharge and overcharging generate excessive lithium-ion reactions with the electrolyte, accelerating electrode degradation and shortening battery lifespan.
EverExceed’s smart BMS protection system effectively prevents overcharge, over-discharge, overcurrent, and short-circuit conditions.


2. Environmental Temperature

  • Low temperatures significantly reduce electrolyte ionic conductivity, leading to lower available capacity.

  • High temperatures accelerate electrolyte decomposition and electrode material degradation, directly causing capacity loss.

EverExceed lithium battery systems are designed to operate over a wide temperature range and can be integrated with thermal management solutions for demanding environments.


3. Gas Generation

Side reactions during battery operation may produce gases or secondary compounds, causing internal pressure imbalance. This affects electrode contact and internal resistance, leading to reduced battery capacity and potential safety risks.

Through strict quality control, advanced production processes, and multi-level safety design, EverExceed minimizes gas generation and ensures high system reliability.


Additional Influencing Factors

Other factors such as improper battery design, manufacturing defects, and incorrect usage conditions can also contribute to capacity degradation. These include:

  • Unreasonable structural design causing mechanical stress

  • Uneven distribution of electrode materials

  • Exposure to overcharge, over-discharge, or high-temperature conditions during operation

EverExceed follows ISO-certified quality management systems from R&D to mass production, ensuring that every lithium-ion battery delivers high safety, long cycle life, and stable performance.


Conclusion

Lithium-ion battery capacity degradation is the result of multiple internal and external factors acting together. Through advanced materials, optimized structural design, and intelligent BMS control, EverExceed provides high-performance lithium-ion batteries, UPS lithium battery systems, and energy storage solutions with extended service life and reduced total cost of ownership.

 

EverExceed remains committed to delivering safe, reliable, and long-life lithium battery solutions for global critical power and energy storage applications.

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