The Al-air battery possesses high theoretical specific energy (4140 W h/kg) and is therefore an attractive candidate for vehicle propulsion. However, the experimentally observed open-circuit potential is much lower than what bulk thermodynamics predicts, and this potential loss is typically attributed to corrosion. Similarly, large Tafel slopes associated with the battery are assumed to be due to film formation. We present a detailed thermodynamic study of the Al-air battery using density functional theory. The results suggest that the maximum open-circuit potential of the Al anode is only -1.87 V versus the standard hydrogen electrode at pH 14.6 instead of the traditionally assumed -2.34 V and that large Tafel slopes are inherent in the electrochemistry. These deviations from the bulk thermodynamics are intrinsic to the electrochemical surface processes that define Al anodic dissolution. This has contributions from both asymmetry in multielectron transfers and, more importantly, a large chemical stabilization inherent to the formation of bulk Al(OH)3 from surface intermediates. These are fundamental limitations that cannot be improved even if corrosion and film effects are completely suppressed.