Provided is an anode active material electrode for a lithium battery. This electrode layer comprises multiple particulates of an anode active material, wherein at least a particulate is composed of one or a plurality of particles of an anode active material being encapsulated by a thin layer of sulfonated elastomer/graphene composite having from 0.01% to 50% by weight of graphene sheets dispersed in a sulfonated elastomeric matrix material, wherein the encapsulating shell composite has a thickness from 1 nm to 10 μm, a lithium ion conductivity from 10−7 S/cm to 5×10−2 S/cm, and an electrical conductivity from 10−7 S/cm to 100 S/cm when measured at room temperature. The anode active material is preferably selected from Si, Ge, Sn, SnO2, SiOx, Co3O4, Mn3O4, etc., which has a specific capacity of lithium storage greater than 372 mAh/g (the theoretical lithium storage limit of graphite).