In recent years, there have been significant efforts to understand the role of the electronic structure of redox active materials according to their performance and thermodynamic stability in electrochemical storage devices and to develop novel materials with higher energy density and higher power. It is generally recognized that transition metal compounds used as a positive electrode determine the specific capacity and the energy density of rechargeable batteries, while the charge transfer resistance at the electrolyte–electrode interface plays a key role in delivering the power of the electrochemical cell. In the present work, we study the stability of LixNi0.2Co0.7Mn0.1O2 thin films through the evolution of the occupied and unoccupied density of states as a function of the charging state of the electrode as well as the physicochemical conditions influencing the ionic transport across the electrode–electrolyte interface. A comprehensive experimental quasi in situ approach has been applied by using synchrotron X-ray photoelectron spectroscopy (SXPS) and O K-edge and Co, Ni, Mn L-edges XANES. Our experimental data demonstrate the change of the Fermi level position with Li+ removal and Ni2+ → Ni4+ and Co3+ → Co4+ changes of oxidation state for the charge compensation in the bulk of the material. As is evidenced by the experimentally determined energy band diagram of Lix≤1.0Ni0.2Co0.7Mn0.1O2 vs the evolution of the Fermi level, no hole transfer to the O2p bands is observed up to a charging state of 4.8 V, which evidences the thermodynamic stability of Lix≤1.0Ni0.2Co0.7Mn0.1O2 under high charging voltage in contrast to LiCoO2. A very thin solid electrolyte interface layer (less than 30 Å thickness) on the Lix≤1.0Ni0.2Co0.7Mn0.1O2 film is formed in a decomposition reaction of the electrolyte also involving the transition metal oxide. The enhanced concentration of lithium in the interface layer correlates evidently with the electron transfer to the transition metal sites changing their electronic configuration. It is concluded that Lix≤1.0Ni0.2Co0.7Mn0.1O2 can serve as a high energy density cathode material, but the delivery of high power, which is a critical parameter for an electric vehicle, is strongly influenced by the physicochemical conditions at the solid electrolyte interface, which can suppress Li+ diffusion or even block the Li+ paths across the interface.