The voltage at a battery's terminals will drop when it supplies current. What is the cause of the drop?

Every real-world power source, including chemical batteries, has a small amount of inherent resistance within its physical materials. This is known as internal resistance. When a battery is connected to a circuit and begins to supply current, this internal resistance causes a slight voltage drop inside the battery itself, as dictated by Ohm's Law (V = I x R). Because of this internal voltage drop, the voltage measured at the external terminals while under load will always be lower than the battery's open-circuit resting voltage. Distractors like 'current capacity' refer to the total energy storage of the battery, not the physical mechanism causing the voltage to sag under load.