The emerging Li−CO 2 batteries are considered a promising next-generation power system because they can fix CO 2 while storing energy; however, their underlying mechanism remains elusive, impeding their efficient development. Meanwhile, apart from the conventional discharge product Li 2 CO 3 , the unexpected Li 2 O species has also been detected, but its formation process is thus far undecided. Here, we report a new mechanism for Li−CO 2 batteries using first-principles calculations, which explains the long-standing puzzles. We show that such a process can be divided into two stages: (I) forming intermediate *Li 2 C 2 O 4 via surface lithiation and (II) generating −Li 2 CO 3 and C through a *Li 2 O-mediated pathway. We discover that the major kinetic barrier occurs in the coupling of *Li 2 CO 2 and CO 2 in the first stage. Especially, in the second stage, *CO produced from *Li 2 C 2 O 4 decomposition is preferentially lithiated to *LiOC rather than disproportionated, and then *LiOC can be further lithiated to intermediate *Li 2 O after C nucleation, which contributes to the final formation of Li 2 CO 3 in the presence of sufficient CO 2 .