This video explains how lithium-ion batteries work by separating lithium atoms from a metal oxide and guiding the lost electrons through an external circuit to produce electricity. The lithium ions and electrons are stored in the graphite layer of the battery and are separated by a layer of insulation. Tesla's battery management system monitors the battery's temperature, charge, and cell status. When lithium ions reach the graphite, they react with solvent molecules in the electrolyte to form a layer called SEI, which helps prevent direct contact between the electrons and the electrolyte, saving the electrolyte from degradation. Finally, scientists are investing in replacing graphite with silicon to increase the energy density of the battery cell, and the lithium-ion battery market is expected to become a $90 million industry in a few years.