One of the earliest examples of research into lithium-ion batteries is a /Li battery developed by NASA in 1965. The breakthrough that produced the earliest form of the modern Li-ion battery was made by British chemist M. Stanley Whittingham in 1974, who first used titanium disulfide () as a cathode material, which has a layered structure that can take in lithium ions without significant crystal structure changes. Exxon tried to commercialize this battery in the late 1970s, but found the synthesis expensive and complex, as is sensitive to moisture and releases toxic hydrogen sulfide () gas on contact with water. More prohibitively, the batteries were also prone to spontaneously catch fire due to the presence of metallic lithium in the cells. For this, and other reasons, Exxon discontinued the development of Whittingham's lithium-titanium disulfide battery.

In 1980, working in separate groups Ned A. Godshall et al.,Godshall, Ned A. (17 October 1979) "Electrochemical and Thermodynamic Investigation of Ternary Lithium-Transition Metal-Oxide Cathode Materials for Lithium Batteries: Li2MnO4 spinel, LiCoO2, and LiFeO2", Presentation at 156th Meeting of the Electrochemical Society, Los Angeles, CA.Godshall, Ned A. (18 May 1980) Electrochemical and Thermodynamic Investigation of Ternary Lithium-Transition Metal-Oxygen Cathode Materials for Lithium Batteries. Ph.D. Dissertation, Stanford University and, shortly thereafter, Koichi Mizushima and John B. Goodenough, after testing a range of alternative materials, replaced with lithium cobalt oxide (, or LCO), which has a similar layered structure but offers a higher voltage and much more stability in air. This material would later be used in the first commercial Li-ion battery, although it did not, on its own, resolve the persistent issue of flammability.

These early attempts to develop rechargeable Li-ion batteries used lithium metal anodes, which were ultimately abandoned due to safety concerns, as lithium metal is unstable and prone to dendrite formation, which can cause short-circuiting. The eventual solution was to use an intercalation anode, similar to that used for the cathode, which prevents the formation of lithium metal during battery charging. The first to demonstrate lithium ion reversible intercalation into graphite anodes was Jürgen Otto Besenhard in 1974. Besenhard used organic solvents such as carbonates for an electrolyte, however these solvents decomposed rapidly providing short battery cycle life. Later, in 1980, Rachid Yazami used a solid organic electrolyte, polyethylene oxide, which was more stable.International Meeting on Lithium Batteries, Rome, 27–29 April 1982, C.L.U.P. Ed. Milan, Abstract #23

In 1985, Akira Yoshino at Asahi Kasei Corporation discovered that petroleum coke, a less graphitized form of carbon, can reversibly intercalate Li-ions at a low potential of ~0.5 V relative to Li+ /Li without structural degradation.Yoshino, A., Sanechika, K. & Nakajima, T. Secondary battery. JP patent 1989293 (1985) Its structural stability originates from its amorphous carbon regions, which serve as covalent joints to pin the layers together. Although it has a lower specific capacity compared to graphite (~Li0.5C6, 186 mAh g–1), it became the first commercial intercalation anode for Li-ion batteries owing to its cycling stability. In 1987, Yoshino patented what would become the first commercial lithium-ion battery using this anode. He used Goodenough's previously reported LiCoO2 as the cathode and a carbonate ester-based electrolyte. The battery was assembled in the discharged state, which made it safer and cheaper to manufacture. In 1991, using Yoshino's design, Sony began producing and selling the world's first rechargeable lithium-ion batteries. The following year, a joint venture between Toshiba and Asahi Kasei Co. also released a lithium-ion battery. Significant improvements in energy density were achieved in the 1990s by replacing Yoshino's soft carbon anode first with hard carbon and later with graphite.

In 1990, Jeff Dahn and two colleagues at Dalhousie University (Canada) reported reversible intercalation of lithium ions into graphite in the presence of ethylene carbonate solvent (which is solid at room temperature and is mixed with other solvents to make a liquid). This represented the final innovation of the era that created the basic design of the modern lithium-ion battery.

In 2010, global lithium-ion battery production capacity was 20 gigawatt-hours. By 2016, it was 28 GWh, with 16.4 GWh in China. Global production capacity was 767 GWh in 2020, with China accounting for 75%. Production in 2021 is estimated by various sources to be between 200 and 600 GWh, and predictions for 2023 range from 400 to 1,100 GWh.

In 2012, John B. Goodenough, Rachid Yazami and Akira Yoshino received the 2012 IEEE Medal for Environmental and Safety Technologies for developing the lithium-ion battery; Goodenough, Whittingham, and Yoshino were awarded the 2019 Nobel Prize in Chemistry "for the development of lithium-ion batteries". Jeff Dahn received the ECS Battery Division Technology Award (2011) and the Yeager award from the International Battery Materials Association (2016). Before lithium-ion: 1960-1975

1960s: Much of the basic research that led to the development of the intercalation compounds that form the core of lithium-ion batteries was carried out in the 1960s by Robert Huggins and Carl Wagner, who studied the movement of ions in solids. In a 1967 report by the US military, plastic polymers were already used as binders for electrodes and graphite as a constituent for both cathodes and anodes, mostly for cathodes. 1970s: Reversible intercalation of lithium ions into graphite as anodes and intercalation of lithium ions into cathodic oxide as cathodes was discovered during 1974–76 by Jürgen Otto Besenhard at the Technical University of Munich. Besenhard proposed its application in lithium cells. What was missing from Besenhard's batteries was a solvent that avoided co-intercalation into graphite, electrolyte decomposition and corrosion of current collectors. Thus, his batteries had very short cycle lives. 1970s: Reversible intercalation of lithium ions into layered cathode materials. British chemist, M. Stanley Whittingham, then a researcher at ExxonMobil, first reported charge-discharge cycling with a lithium metal battery (a precursor to modern lithium-ion batteries) in the 1970s. Drawing on previous research from his time at Stanford University, he used a layered titanium(IV) sulfide as cathode and as anode. However, this setup proved impractical. Titanium disulfide was expensive (~$1,000 per kilogram in the 1970s) and difficult to work with, since it has to be synthesized under completely oxygen- and moisture-free conditions. When exposed to air, it reacts to form hydrogen sulfide compounds, which have an unpleasant odour and are toxic to humans and most animals. For this, and other reasons, Exxon discontinued development of Whittingham's lithium-titanium disulfide battery.

Batteries with metallic lithium electrodes presented safety issues, most importantly the formation of lithium dendrites, that internally short-circuit the battery resulting in explosions. Also, dendrites often lose electronic contact with current collectors leading to a loss of cyclable Li+ charge. Consequently, research moved to develop batteries in which, instead of metallic lithium, only lithium compounds are present, being capable of accepting and releasing lithium ions.

1973: Adam Heller proposed the lithium thionyl chloride battery, still used in implanted medical devices and in defense systems where a greater than 20-year shelf life, high energy density, and/or tolerance for extreme operating temperatures are required. However, this battery employs unsafe lithium metal and was not rechargeable.

Precommercial development: 1974-1990 1974: Besenhard was the first to show reversibility of Li-ion intercalation into graphite anodes, using organic solvents, including carbonate solvents. 1976: Stanley Whittingham and his colleagues at Exxon demonstrated what can be considered the first rechargeable "lithium-ion battery", although not a single component in this design was used in commercial lithium-ion batteries later. Whittingham's cell was assembled in a charged state using lithium aluminum alloy as the negative electrode, LiBPh4 (lithium tetraphenylborate) in dioxolane as the electrolyte and TiS2 as the positive electrode. The battery's useful cycle life was no more than 50 cycles. This design was based on Whittingham's earlier Li-metal batteries. 1977: Samar Basu et al. demonstrated irreversible intercalation of lithium in graphite at the University of Pennsylvania. This led to the development of a workable lithium-intercalated graphite electrode at Bell Labs in 1984 () as an alternative to the lithium-metal electrode battery. However, it was a molten-salt cell rather than a lithium-ion battery. 1978: Michel Armand introduced the term and a concept of a rocking-chair battery,1978 NATO conference on Materials for Advanced Batteries, Aussios, France. Cited from ISBN 978-1-61249-762-4. page 94. where the same type of ion is de/intercalated into both positive and negative electrode during dis/charge. In the rocking-chair design solution-phase species do not appear in the reaction stoichiometry, which allows for minimizing the amount of solvent in the battery, reduces the battery weight and cost. 1979: Working in separate groups, Ned A. Godshall et al.,Godshall, Ned A. (17 October 1979) "Electrochemical and Thermodynamic Investigation of Ternary Lithium -Transition Metal-Oxide Cathode Materials for Lithium Batteries: Li2MnO4 spinel, LiCoO2, and LiFeO2", Presentation at 156th Meeting of the Electrochemical Society, Los Angeles, CA. and, shortly thereafter, John B. Goodenough (Oxford University) and Koichi Mizushima (Tokyo University), demonstrated limited discharge-charge cycling of a 4 V cell made with lithium cobalt dioxide () as the positive electrode and lithium metal as the negative electrode. This innovation provided the positive electrode material, which eventually became a component in the first commercial rechargeable lithium-ion battery. is a stable positive electrode material which acts as a donor of lithium ions, which means that it can be used with a negative electrode material other than lithium metal. By enabling the use of stable and easy-to-handle negative electrode materials, enabled novel rechargeable battery systems. Godshall et al. further identified the similar value of ternary compound lithium-transition metal-oxides such as the spinel LiMn2O4, Li2MnO3, LiMnO2, LiFeO2, LiFe5O8, and LiFe5O4 (and later lithium-copper-oxide and lithium-nickel-oxide cathode materials in 1985) Godshall et al. patent Godshall, N. A.; Raistrick, I. D. and Huggins, R. A. "Ternary Compound Electrode for Lithium Cells"; issued 20 July 1982, filed by Stanford University on 30 July 1980. for the use of LiCoO2 as cathodes in lithium batteries was based on Godshall's Stanford University Ph.D. dissertation and 1979 publications. 1980: M. Lazzari and Bruno Scrosati at the University of Rome validated the concept of rocking-chair battery using lithium tungsten dioxide as the anode, titanium disulfide as the cathode and lithium perchlorate in propylene carbonate as the electrolyte. 1980's: The negative electrode has its origins in PAS (polyacenic / polyacetylene semiconductive material) discovered by Tokio Yamabe and later by Shizukuni Yata in the early 1980s. This development was inspired by an earlier discovery of conductive polymers by Professor Hideki Shirakawa and his group, and it could also be seen as having started from the polyacetylene lithium-ion battery developed by Alan MacDiarmid and Alan J. Heeger et al.