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Xbox button not powering on controller

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I just got a new Xbox one controller v2, but it won't turn on when I press the Xbox button.

When I connect the USB cable it starts and works just fine, I can even remove the cable once the controller is up and running and it maintains its connection to my Xbox. But as soon as I turn it of I need the USB cable to "jump start" the controller again.

The Xbox button and everything works as intended after I turned on the controller (with the cable), it just doesn't  work as an "on switch" for the controller.

It is updated to the latest firmware and I've tried different batteries.

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Xbox One Wireless Controller Model 1708

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open