I cannot believe that no-one (including MacRumors) is able to understand a diagram, or a description.
This cover does not include a battery! You do not plug the cover into a power source!
The cover has an internal induction aerial to charge the iPad's internal battery. I.e. having a metal case the ipad cannot use an internal aerial to charge by induction, so it has to be placed outside the metal enclosure. The cover, being non-conductive, is a good place for the aerial to be. The aerial is foldable, to enable the cover to work as the current one does. The induction charging only takes place when the cover is closed over the screen.