Lithium batteries are considered the key storage devices for most emerging green technologies such as wind and solar technologies or hybrid and plug-in electric vehicles. Despite the tremendous recent advances in battery research, surprisingly, several fundamental issues of increasing practical importance have not been adequately tackled. One such issue concerns the energy efficiency. Generally, charging of 10(10)-10(17) electrode particles constituting a modern battery electrode proceeds at (much) higher voltages than discharging. Most importantly, the hysteresis between the charge and discharge voltage seems not to disappear as the charging/discharging current vanishes. Herein we present, for the first time, a general explanation of the occurrence of inherent hysteretic behaviour in insertion storage systems containing multiple particles. In a broader sense, the model also predicts the existence of apparent equilibria in battery electrodes, the sequential particle-by-particle charging/discharging mechanism and the disappearance of two-phase behaviour at special experimental conditions.