The TimeCapsule is a candy bar-sized enclosure that replaces the AirTag's CR2032 coin cell battery with electrical contacts and slots for a pair of AA batteries. According to Elevation Lab's Casey Hopkins, it's made of “fiber reinforced polycarbonate” that won't block or reduce the range of Bluetooth or UWB signals. The case also has an IP69 rating, which provides the highest protection against ingress of water, dust and dirt. No point in a ten-year-old tracker that can't handle a puddle.
Of course, there are tradeoffs. The TimeCapsule weighs 3.5 ounces with installed batteries .39 ounces for a regulation AirTagAnd the case reduces the AirTag's chirping volume by about a third, potentially making it harder to detect by ear. But for situations where you don't really want to replace your AirTag's battery every year, it seems a small price to pay.
The company recommends using Energizer Ultimate Lithium AA to maximize battery life and avoid the leaks and corrosion that alkaline batteries are known for. You can also use nickel-metal hydride batteries, but they will not last as long before needing to be recharged.