The LaNi4.5Co0.5 hydrogen storage material degradation process in 6 M KOH solution fulfills first-order chemical reaction kinetic law. After ca 10 first cycles, up to N = 45 cycle, the logarithm of discharge capacity linearly decreases with cycle number. The slope of logQdisch = f(N) straight lines is a measure of degradation rate constant (kdegr). Corrosion rate of the tested material is directly proportional to kdegr. The LaNi4.5Co0.5 powder encapsulation with electroless Ni–P is prone to evident increase of the hydride electrode corrosion resistance. Additionally, encapsulation improves the charge/discharge kinetics: the exchange currents of H2O/H2 system are 20% greater for the chemically treated powder.