The invention discloses a flame retardant additive, a preparation method of the flame retardant additive and a lithium battery. The flame retardant additive is of a core shell structure, and comprises a flame retardant, an organic matter shell layer, an inorganic oxide shell layer or an organic and inorganic composite shell layer, wherein the organic matter shell layer, the inorganic oxide shell layer or the organic and inorganic composite shell layer is coated on the outer surface of the flame retardant; the flame retardant additive can be coated on the positive electrode and the negative electrode of the lithium battery or the surface of an isolation membrane through a bonding agent; or the flame retardant additive is added into electrolyte. When the flame retardant additive is applied to the lithium battery, the flame retardant is not directly in contact with the electrolyte of the lithium battery, so that the flame retardant cannot cause adverse influence on the performance of the lithium battery. The corresponding flame retardant additive can be selected according to the burning temperature of the electrolyte, so that the melting point of a shell layer of the flame retardant additive or the gasification temperature of the flame retardant is smaller than the burning temperature of the electrolyte; before the temperature of the electrolyte of the lithium battery reaches the burning temperature, the flame retardant is released from the shell layer, so that the flame retardant achieves a flame retardant effect; the burning or the explosion of the lithium battery is prevented; the safety of the lithium battery is improved.