A rechargeable battery holds less charge after a few years than it did when new, and the loss is permanent. It happens because charging and discharging slowly consume the materials that make the cell work.
Charging moves lithium between two electrodes
A lithium cell works by shuttling lithium ions from one electrode to the other and back, with the movement of those ions constituting the current the device draws.
Capacity is therefore set by how much lithium remains available to make that journey, and by how readily the electrode structures can accept it.
Anything that removes lithium from circulation, or blocks the sites it occupies, reduces capacity permanently rather than temporarily.
A protective layer grows on the negative electrode
During the first charges, a thin film forms on the negative electrode from the breakdown of the electrolyte, and this film is necessary for the cell to function stably.
The film continues to grow slowly throughout the cell's life, and each increment consumes a small quantity of lithium that is never returned to service.
Growth is faster at high temperature and at high states of charge, which is why storage conditions affect a battery that is not being used at all.
Resistance rises as well as capacity falling
The same processes that consume lithium also make it harder for ions to move through the cell, which raises internal resistance.
Higher resistance means more of the energy is lost as heat during use, and it causes voltage to sag under load, which devices interpret as an empty battery.
This is why an aged phone can shut down abruptly with charge apparently remaining. The chemistry has capacity left but cannot deliver current fast enough.
Cycling and calendar ageing are separate
Cycle ageing depends on how much charge has passed through the cell, while calendar ageing proceeds with time regardless of whether the battery is used.
Both are accelerated by heat, which is the single largest environmental factor and the reason charging in hot conditions is discouraged.
Depth of discharge matters too, since holding a cell at the extremes of its range places more stress on the electrodes than cycling within a narrower band.
Management systems hide part of the range
Devices reserve a margin at the top and bottom of the true chemical range, so the reported full charge is deliberately short of the cell's actual limit.
Reserving that margin costs usable capacity on day one but slows degradation considerably, which is judged the better trade over a product's life.
Some devices now adapt the charging pattern to observed usage, holding at a lower level until shortly before the user typically needs a full charge.