Lithium-ion battery-based energy storage systems have been widely utilized in many applications such as transportation electrification and smart grids. As a key health status indicator, battery performance would highly rely on its capacity, which is easily influenced by various electrode formulation parameters within a battery. Due to the strongly coupled electrical, chemical, thermal dynamics, predicting battery capacity, and analysing the local effects of interested parameters within battery is significantly important but challenging. This article proposes an effective data-driven method to achieve effective battery capacity prediction, as well as local effects analysis. The solution is derived by using generalized additive models (GAM) with different interaction terms. Comparison study illustrate that the proposed GAM-based solution is capable of not only performing satisfactory battery capacity predictions but also quantifying the local effects of five important battery electrode formulation parameters as well as their interaction terms. Due to data-driven nature and explainability, the proposed method could benefit battery capacity prediction in an efficient manner and facilitate battery control for many other energy storage system applications.