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What's the chemistry behind only charging a Lithium-ion battery to 80% capacity at most, to increase its lifespan?

Over on the Skeptics StackExchange, a question has come up about charging Lithium-ion cells to just 80% of their maximum, in order to extend their lifetime.

Is there a sound basis in chemistry for such a recommendation, and if so, what is it?

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Actually, the chemistry is just the same as chemistry of charging, it's the physics - mechanics of the microstructures collapsing. – SF. May 22 '13 at 7:52

Most commercially-available lithium-ion batteries use graphite as the anode (negative electrode, where the lithium ions go when the battery is charged) and $Li Co O_2$ as the cathode (positive electrode, where the lithium ions go when the battery is discharged). Both graphite and lithium cobalt oxide have a structure composed of layers stacked on top of one another; the lithium ions fit in between these layers in a process called intercalation.

The lithium sitting between the layers props the layers apart. If too much of the lithium is removed from either the cathode (over-charging) or the anode (over-discharging) then the layers can collapse back together and it becomes hard to put the lithium back in. Normally batteries have control circuitry to prevent the cells from over-charging or over-discharging but this circuitry is not always perfect, particularly for smaller, simpler battery packs.

That said, AFAIK the circuitry is already set to limit charging and discharging to well below the theoretical maximum capacity, so I would not recommend limiting the charge any further. Perhaps unscrupulous vendors will cut the amount of active material inside their batteries while keeping the rated capacity the same and therefore run the cells closer to their theoretical maximum, in which case keeping charge and discharge within their rated limits would be a good idea, but it should not be necessary for high-quality batteries.

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