Renewable lithium batteries are widely used in both hybrid and pure electric vehicles. Graded materials have structural heterogeneity and anisotropy which allows for these materials to have excellent energy storage capabilities. These important capabilities are why these materials are so fundamental in search for safe, renewable energy storage. As the development of graded materials used in battery development has increased rapidly, the effect of degradation on these batteries has emerged as an issue of international concern. In academic settings specifically, research efforts are focused equally on the capacity degradation of lithium batteries and the security of energy storage. This paper will describe recent advancements in understanding lithium battery performance degradation. To accomplish this goal, this paper will include theoretical characterization models and microscale experimental techniques. In the section that outlines our laboratory work, the impact of coupled degradation effect on the safety of lithium battery is highlighted. The theoretical and experimental analysis section will show that the relationship between degradation (such as dislocations, holes and pores) and energy storage safety is reflected so as to deepen the understanding of the issue’s nature. By discussing battery security and predicting battery performance, this paper evaluates the impact of battery degradation and the corresponding control strategies, offering scientific basis and technical support for the development of sustainable energy.