The U.S. government eventually terminated Goodenough's research funding, so during the late 1970s and early 1980s, he left the United States and continued his career as head of the Inorganic Chemistry Laboratory at the University of Oxford. Among the highlights of his work at Oxford, Goodenough is credited with significant research essential to the development of commercial lithium-ion rechargeable batteries. Goodenough was able to expand upon previous work from M. Stanley Whittingham on battery materials, and found in 1980 that by using LiCoO as a lightweight, high energy density cathode material, he could double the capacity of lithium-ion batteries. 
Although Goodenough saw a commercial potential of batteries with his LiCoO2 and LiNiO2 cathodes and approached Oxford University with a request to patent this invention, Oxford refused. Unable to afford the patenting expenses with his academic salary, Goodenough turned to UKs Atomic Energy Research Establishment in Harwell, which accepted his offer, but under the terms, which provided zero royalty payment to the inventors John B. Goodenough and Koichi Mizushima. In 1990, the AERE licensed Goodenoughs patents to Sony Corporation, which was followed by other battery manufacturers. It was estimated, that the AERE made over 10 mln. British pounds from this licensing.
The work at Sony on further improvements to Goodenough's invention was led by Akira Yoshino, who had developed a scaled up design of the battery and manufacturing process. Goodenough received the Japan Prize in 2001 for his discoveries of the materials critical to the development of lightweight high energy density rechargeable lithium batteries, and he, Whittingham, and Yoshino shared the 2019 Nobel Prize in Chemistry for their research in lithium-ion batteries.