The rising demand for high-performance lithium-ion batteries, pivotal to electric transportation, hinges on key materials like the Ni-rich layered oxide LiNi_xCo_yAl_zO₂ (NCA) used in cathodes. The present study investigates the redox mechanisms, with particular focus on the role of oxygen in commercial NCA electrodes, both fresh and aged under various conditions (aged cells have performed >900 cycles until a cathode capacity retention of ∼80%). Our findings reveal that oxygen participates in charge compensation during NCA delithiation, both through changes in transition metal (TM)–O bond hybridization and formation of partially reversible O₂, the latter occurs already below 3.8 V vs. Li/Li⁺. Aged NCA material undergoes more significant changes in TM–O bond hybridization when cycling above 50% SoC, while reversible O₂ formation is maintained. Nickel is found to be redox active throughout the entire delithiation and shows a more classical oxidation state change during cycling with smaller changes in the Ni–O hybridization. By contrast, Co redox activity relies on a stronger change in Co–O hybridization, with only smaller Co oxidation state changes. The Ni–O bond displays an almost twice as large change in its bond length on cycling as the Co–O bond. The Ni–O₆ octahedra are similar in size to the Co–O₆ octahedra in the delithiated state, but are larger in the lithiated state, a size difference that increases with battery ageing. These contrasting redox activities are reflected directly in structural changes. The NCA material exhibits the formation of nanopores upon ageing, and a possible connection to oxygen redox activity is discussed. The difference in interaction of Ni and Co with oxygen provides a key understanding of the mechanism and the electrochemical instability of Ni-rich layered transition metal oxide electrodes. Our research specifically highlights the significance of the role of oxygen in the electrochemical performance of electric-vehicle-grade NCA electrodes, offering important insights for the creation of next-generation long-lived lithium-ion batteries.