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Ultimiate Guide: What Are Lithium Ion Batteries

Posted by author 4th Jul., 2022

What are batteries │ Lithium ion batteries │ Battery energy storage system

Batteries are the electrochemical energy storage device/system, reversibly transformed between electric energy and chemical energy under redox reaction.

Lithium ion batteries receive, store, manage and transform electric power through electrochemical energy storage technology. They bring us portable electronics and make intelligence possible towards the next generation.

Lithium ion batteries can also supply electric power to power grid(on-grid/off-grid), large industrial power, electric vehicle, etc.

what are lithium ion batteries

So in this post I will tell you what are lithium ion batteries exactly? What are inside lithium ion batteries? and How are the lithium ion batteries’ market right now?

Definition: What are lithium ion Batteries?

Lithium ion batteries are rechargeable batteries, which have a bunch of storable lithium-ion elements wandering between anode(negative electrode) and cathode(positive electrode) inside the solid compounds.
The lithium-ion moves from anode to cathode inside the liquid electrolyte when discharge, and then the device/system gets current from positive electrode(cathode) to negative electrode(anode) back to the battery – electron moves from N(-) to P(+).
When charging, the voltage from the charger pushes the lithium-ion back to anode inside the liquid electrolyte, and electron from positive electrode(cathode) to negative electrode(anode) inside the charger.
lithium ion batteries working principle
Pic 1.1: Lithium ion batteries working principle
This is called the Oxidation-Reduction Reaction(Redox Reaction).

With the development of the battery technology among these thirty years, lithium ion batteries are mature enough to apply to many kinds of industries, and it is undeniably that they are already better than many other batteries.

How is it possible?

  • High quality storable lithium ion within high volume density, which is reversible
  • Wide distribution of lithium element around the world(no worry for supply or replacement)
  • High voltage differential between negative electrode and positive electrode(same voltage with less batteries and size)
  • Electrolyte and components with higher electrical conductivity(which means much higher energy transformation rate into your products)
  • More and more successful and advanced battery design and BMS technology for energy area. Etc
declining battery price
Pic 1.2: Growing energy density and declining price
So what are lithium ion batteries? Lithium ion batteries are more than the portable electronic products or power tools.

Material: What are inside lithium ion batteries

Lithium ion batteries have three key parts:

and some other components like aluminum foil on cathode and copper foil on anode, porous diagram to separate both electrodes, steel shell or aluminum shell, shell cover, etc.

positive electrode material
Pic 2.1: Positive electrode material on lithium ion batteries over years

Positive Electrode

The positive electrode(cathode) contains lithium-metal compounds, such as lithium cobalt oxide(LCO), lithium manganese oxide(LMO), lithium nickel-cobalt-aluminum oxide(NCA), lithium nickel-manganese-cobalt oxide(NMC or NCM), lithium iron phosphate(LFP), etc.

These positive electrodes are used in different applications according to their energy density, power density, lifespan, safety and expense. The positive electrode is the most expensive unit among any materials in a battery, which costs 30%~50% of all.

It is one of the reason we call a lithium ion battery under its positive electrode material.

cost of each battery material
Pic 2.2: Battery material cost on some batteries
The positive electrode also has inactive electrochemical materials that can improve battery’s electric and structural characteristics, which are conductive carbon powder and polymer adhesive. These active and inactive compounds will be coated on aluminum foil before connecting to external terminals.


Lithium cobalt oxide(LCO) battery is the first commercial lithium ion battery that was invented by Sony in 1991. It generates voltage of 3.7V when reacted to the negative electrode – graphite, and the 3.7V is not the voltage that can be handled by any water-soluble electrolyte.

The problem with LCO battery is that

  • it is quite unstable on high temperature – thermorunaway happens when temperature goes to 150℃;
  • It has quite unstable cycle lifespan – 50 times to 600 times
  • the cobalt is the higher cost material.
Some portable electronics are still using LCO battery because of their larger energy density(150Wh/kg ~ 240Wh/kg), but that doesn’t quite seem possible to put in battery energy storage system for industrial power or power grid purpose.
LCO Battery Specification
Material LiCoO2(60% cobalt) + graphite
Voltage nominal 3.60V ~ 3.80V, working 2.40V ~ 4.2V
Energy Density 150Wh/kg ~ 200Wh/kg(max 240Wh/kg)
Charging Rate 0.7C ~ 1C
Discharging Rate 0.5C ~ 1C
Cycle Lifespan 50 times ~ 600 times
Thermal Control 150℃(302℉), especially fully charge condition
Application mobile phone, tablet PC, laptop, camera, etc


Since cobalt has large energy density but higher cost, can we partially replace it to lower the overall cost?

The answer is yes! That’s nickel, manganese, and aluminum.

Lithium nickel-cobalt-aluminum oxide(NCA) battery, nominal voltage of 3.6V, has the same energy density as LCO battery(200~250Wh/kg), longer cycle lifespan of 1000 times, and much lower metal cost(nickel can be accounted for up to 85% of the NCA battery).

Lithium NCA oxide is the main positive electrode on Tesla’s electric cars, they use proportion of N:C:A=8:1.5:0.5 – aluminum takes as transition metal into manganese to upgrade the battery cycle life.

However, NCA battery has a more difficult technique than NMC battery, which makes NMC battery a cheaper option among lithium ion batteries.

NCA Battery Specification
Material LiNiCoAlO2(>9% Cobalt)+graphite
Voltage nominal 3.60V, working 2.70V ~ 4.35V
Energy Density 200Wh/kg ~ 260Wh/kg(max 300Wh/kg)
Charging Rate 0.2C ~ 0.7C
Discharging Rate 0.5C ~ 1C
Cycle Lifespan 500 times ~ 1000 times
Thermal Control 150℃(302℉), especially fully charge condition
Application medical device, industry, electric cars, etc


Lithium nickel-manganese-cobalt oxide(NMC) battery, nominal voltage of 3.7V, is a much safer and better performance lithium ion battery. It supports no less than 3 times discharge rate(3C) of the battery capacity, it has the lowest self-discharge rate among lithium ion batteries, and much lighter body weight than many other batteries.

That makes lithium NMC battery* a perfect replacement battery for light weight vehicles, such as bicycles, motorcycles, three-wheelers, etc.

However, the relatively low cycle life(500~1200 times), limited capacity, and bad high temperature performance(210℃) are still the primal problems to be solved before we can completely think about lead acid replacement.

*Note: By using different proportion of nickel, manganese, and cobalt, NMC-622 and NMC-811 are widely used on energy storage system, electric cars and power grid than NMC-111.

NMC Battery Specification
Material LiNiMnCoO2+graphite
Voltage nominal 3.70V, working 2.60V ~ 4.20V
Energy Density 150Wh/kg ~ 220Wh/kg
Charging Rate 0.5C ~ 1C
Discharging Rate 0.5C ~ 3C
Cycle Lifespan 500 times ~ 1200 times
Thermal Control 210℃(410℉)
Application electric bikes, medical equipment, electric cars, industry, etc


Lithium manganese oxid(LMO) battery, nominal voltage of 3.7V~3.9V, has a lower energy density(100~140Wh/kg) and a much lower cycle life(300~700 times) than NMC battery, but this 3D spinel structure material can bring down the internal resistance, improve the current loading capacity, high temperature stability(>250℃), and increase safe reliability.

lmo battery structure
Pic 2.3: LMO battery structure

Low resistance battery make it possible for fast charge(1C~3C) and high current discharge(1C~10C, 30C pulse current for 5 seconds).

That’s why some electric cars are combining LMO battery and NMC battery for better runs: LMO battery supply high current discharge when speeding, NMC battery ensures high continuation of the journey under each charging.

Lithium manganese oxide batteries are as well the lower cost batteries than NMC batteries and even LFP batteries. Power tools, electric bicycles and medical equipment are still using LMO batteries as their power supply.

While on battery energy storage and power grid system, we will need to solve the manganese dissolution problem(50℃)* before the price is going too high.

*Note: Positive electrode particle coating, electrolyte chemical composition redesign, and ionic barrier film) are three helpful solutions to slow down the manganese dissolution problem without higher the cost.

LMO Battery Specification
Material LiMn2O4+graphite
Voltage nominal 3.70V, working 2.50V ~ 4.28V
Energy Density 100Wh/kg ~ 150Wh/kg
Charging Rate 0.5C ~ 1C, max 3C
Discharging Rate 1C ~ 3C(max 30C for 5 seconds)
Cycle Lifespan 300 times ~ 700 times
Thermal Control 250℃(482℉)
Application power tools, medical equipment, power train system/e-cars, etc


Lithium iron phosphate(LFP) battery was first invented in 1996. The Nanoscale phosphate cathode material brings the better electrochemical performance, a lower internal resistance, a higher rated current and a much longer cycle lifespan(5000~10,000 times).

It has the much stable high temperature performance, better safety reliability and much better high/low voltage tolerance than NMC battery.

Lithium iron phosphate battery, however, only has 3.2V nominal voltage and a lower energy density (120~180Wh/kg) than LCO battery. The operating temperature and storage temperature is better not under 0℃ so as to guarantee its long lifespan. High self-discharge rate means it requires delicate production process and advanced Batter Management System(BMS) to fix the equilibrium voltage problem.

It is not cheap to own a LFP battery, but that doesn’t stop LFP battery to be the perfect energy for middle-large scale commercial industry, household solar energy storage, power grid and sometimes, electric cars.

LFP Battery Specification
Material LiFePO4+graphite
Voltage nominal 3.20V, working 2.50V ~ 3.65V
Energy Density 120Wh/kg ~ 180Wh/kg
Charging Rate 0.5C ~ 1C
Discharging Rate 1C ~ 3C(max 25C)
Cycle Lifespan  2000 times ~ 3000 times
Thermal Control 270℃(518℉)
Application portable and stationary energy storage system, electric cars, industry, etc

Negative Electrode

The negative electrode(anode) contains graphite based materials, and different number of silicon is added to some high energy density lithium ion batteries. These active compounds will mix with conductive additive and adhesive before coating copper foil.

The positive-negative compounds mostly ensure battery’s capability and performance, which can be applied to different scenarios to a great extent.

Why graphite? Is there any other material can be taking as lithium ion batteries’ negative electrode?

The answer is yes and no.

(1)Carbonaceous material

Graphite carbon, amorphous carbon and graphene are three main graphite based materials, we call it carbonaceous material.

The pros of carbonaceous material:

  • Resource-rich raw material around the world(especially in China)
  • High tap density comes with higher energy density(about 300Wh/kg)
  • One of the most stable electrochemical performance material(high temperature resistance, acid/alkali resistance, organic solvent resistance, etc)
  • The electrical conductivity is 100 times higher than general non-metal minerals(electron rich material), while thermal conductivity is better than metal materials like steel, iron, lead, etc(no expansion or overreaction)
  • The graphite can also protect the reaction and movement between positive electrode and negative electrode due to its excellent lubricity and plasticity

The cons of carbonaceous material:

  • The lower gram volume limits the improvement of vehicle battery for better performance
  • The less pure graphite brings much trouble and potential risk
  • The structural stability still needs improvement
  • Worse multiplying rate capability limits the battery performance and charge/discharge current.

(2)Non carbonaceous material

The non carbonaceous material includes titanium based materials, tin based materials, silicon based materials, and nitrides.

Titanium based materials are much safer, higher rate and longer cycle than graphite based materials. The lithium titanate battery(LTO) is the titanium based material, but it needs graphite to augment its electrical conductivity, it has nominal voltage only with 1.5V, and energy density is less than 176mAh/g – much less than graphite’s 372mAh/g.

Tin based materials are much cheaper, safer and environmental friendly than graphite, energy density reaches 1494mAh/g. Nonetheless, tin based battery is an easy to swell up battery with much worse cycle lifespan and damping capacity.

Silicon based materials puts the energy density into 4200mAh/g. The 5C charging technology, proper cycle lifespan(around 1000 times) and successful experiments around the world lead the lithium ion batteries market into the next generation energy. The problem is still the battery expansion situation, high cost for improvement, and the difficulty for industrialization.

Nitrides have a stable electrochemical performance(high temperature resistance and great conductivity) and higher energy density(400~760mAh/g), but they are still the easy to expand, low cycle life, high cost and low rate performance materials.

Liquid Electrolyte

The liquid electrolyte allows the movement of both electrodes for charging and discharging, it contains lithium salt(eg. LiPF6) which is dissolved in organic solvent. The organic solvent compounds include ethylene carbonate(abbr. EC), propylene carbonate(abbr. PC), Methyl ethyl carbonate(abbr. EMC), etc.

These chemical additive within the electrolyte increases the capability, lifespan, and safety of the lithium ion batteries.

Injecting liquid electrolyte into polymer will turn into gel electrolyte, this is what we called as the lithium polymer battery(Li-Po); The gel electrolyte added in PEO becomes solid polymer electrolyte, which is used on low-capacity battery.

Inorganic compound(ceramic) is lately developed by battery manufacturers to replace liquid electrolyte. The solid electrolyte battery with organic or inorganic electrolyte works much better on safety and energy density than battery with liquid electrolyte, but that is not ready for business yet.

There are many different size of the lithium ion batteries, but all goes with two shapes: cylinder and cuboid. Cylindrical battery is a small metal can, cubical battery is a larger metal can(prismatic battery) or a seal bag made by multi-laminate polymer(aka pouch battery).

lithium ion batteries

Pic 2.4: Cylinder and cuboid

The nominal voltage of a lithium ion battery is decided by positive-negative electrode materials. It is applied to small smart phone or big container power supply with high capacity and voltage. Batteries can connect together in serial(voltage) or in parallel(capacity) to set up a battery module or a battery pack.

Extra subsystems are needed to make sure that the whole battery runs correctly and safely, which include thermal management system to adjust the temperature and status monitoring system to control the battery – BMS(battery management system or battery management system units).
Some battery energy storage systems are also required inverters, controllers or transformers before connecting to the equipment.

Market: How are the lithium ion batteries now

It is not until 2013 that lithium ion batteries starts to grow rapidly into many kinds of industries. Portable electronics seemed to be the only service for lithium ion batteries since 1991 till then.

In 2016, portable electronics took up 35% of lithium ion batteries market around world, electric cars and electric bus with 50%(mainly in China), industrial and commercial level energy storage system with 5%(power grid, UPS, etc), others such as medical equipment, power tools, e-bikes, took up 10%.

It was 1000 times production capacity than the year of 1995 already.

battery demand in the future

Pic 3.1: Expected battery demand tendency in the future

The production capacity of lithium ion batteries in 2020 was 301GWh* in the globe, battery energy storage system took up 5.3%(16.2GWh). In 2021 the number of lithium ion batteries was 411GWh, 27.4% of power grid system were using lithium ion batteries all over.

*Note: Data from XYZ-Research Co., Ltd

According to TrendForce report, LFP battery were taking up 32% to 36% of global market in 2021, undoubtedly coming a long way in a short space in 2023, and it is estimated that the market shares of LFP battery are going to surpass NMC battery in 2024.

At the same time, the price had been declining 97% for lithium ion batteries since 1991. In spite of the recent surge of the battery price, it is still expected to reach 12.9 billion US dollars spending on lithium ion batteries in 2027 all over the world.

Lithium ion batteries: What matters

1. LFP Battery

There are so many types of batteries on the market, but there are only two major lithium ion batteries: NMC battery and LFP battery on graphite carbon material.

Some others are either high costing(material or manufacturing), low safety(expansion or impurity) or unstable architecture yet.

LFP battery(LiFePO4 battery), whatsoever, is the most recommended lithium ion batteries before 2030 because of its long cycle lifespan(around 5000 times), lowering comprehensive cost, and improving proven technique.

2. Lower Cost

The price on lithium ion batteries can only be lower and lower on a growing mature market with quick manufacturing capacity.

It doesn’t have to be the complicated method to assemble a battery cell, and a battery management system can be easy enough to control the whole energy system.

Department of Energy(DOE) from USA anticipates to set a $60/kWh* price on lithium ion batteries by 2028. It is expected that lithium ion batteries will cost respectively less than US$100/kWh and US$58/kWh in 2024 and 2030. Tesla is developing their technologies to hopefully reduce cost from US$125/kWh in 2020 to US$55/kWh in 2025.

*Note: Levelized cost for power transmission=Total cost(Battery cost+Operating cost+Maintenance cost)/Gross power generation(kWh)

3. Longer Lifespan

No matter how much we spent on batteries, the longer lifespan means the more cheaper and better products that you could have.

Lifespan includes cycle lifespan and calendar lifespan.

Cycle lifespan is the charge/discharge circles that your battery can be used before 80% total capacity*. The lower charge/discharge current rate and lower depth of discharge(DOD) your battery is used, the longer cycle lifespan and better battery performance it will display. High current rate and deep depth of discharge will absolutely weaken battery.

*Note: A battery out of cycle life can apply to other products with less discharge rate, eg. An EV battery in 80% capacity can serve on energy storage system.

Calendar lifespan is the state of health(SOH) from aging, it starts from production date to expiration date. The battery turns to aging wherever there are self-discharge and high temperature.

Conclusion: Lithium ion batteries on battery energy storage system

Battery Energy Storage System(BESS) is an energy storage container to store or supply electric energy by times by using lithium ion batteries or lead acid batteries.It requires higher energy density than mechanical energy storage and thermal energy storage.

While lithium ion batteries have

  • the much higher energy density(>150Wh/kg),
  • higher energy transformation rate(>92%),
  • higher cycle life-span(>3000 times, especially LFP batteries),
  • wider controllable raw material distribution(lithium, carbon, etc),
  • lower installation cost, and
  • fewer maintenance cost
than lead acid batteries and many other new type batteries(redox flow battery, metal-air battery, etc), battery energy storage system pays more attention to lithium ion batteries’ long duration performance for no less than 8 hours, whether it is for the purpose of accidental emergency power or staggering electricity usage.