Loss of lithium inventory (LLI) is one of the physical causes of Cell degradation.

Main mechanisms of the loss of lithium inventory are the growth of the SEI layer on anode and Lithium plating.

The effect of the loss of lithium inventory on the Cell open-circuit voltage (OCV) curve is described in [1]:

Picture from [1]

Picture from [1]

The OCV decreases more abruptly towards 0% State-of-charge than in a pristine cell, but the shape of the curve for SoC > 50% is almost identical to that in a pristine cell. This effect is almost identical to that of the loss of lithiated anode.

Note that the chart above illustrating as if the cycleable range ends at about 30% SoC is misleading: in practice, SoC is itself estimated from the Cell terminal voltage and thus ranges between 0% and 100% even in degraded cells. See Electrode voltage curves are steeper when the electrode has little lithium for more discussion of this.

Estimated loss of lithium inventory in a cell is one of the Cell parameters.

See also Positive feedback loops of cell degradation associated with loss of Lithium inventory. BMS should use the remaining capacity estimate to narrow down the battery's charge and discharge voltage limits.

We can discern between the physical causes of cell degradation by looking at the OCV function.

References

[1] Degradation diagnostics for lithium ion cells