The mechanism for capacity fade of lithium-ion batteries with LiNi0.8Co0.15Al0.05O2 as a positive electrode material associated with cycling at elevated temperatures was investigated by the combination of electrochemical and spectroscopic methods. The total capacity fade of the battery after charge/discharge cycle test at 80 degrees C was found to be almost explained by the capacity fade of the positive electrode, which indicates that the degradation of the positive electrode is mainly responsible for capacity fade of the battery at this temperature. Quantitative analyses revealed a strong positive correlation between the capacity fade of the positive electrode and the amount of inactive Ni ions in the active material after the cycling test. It is concluded that the capacity fade is mainly caused by the formation of inactive Ni(II) and Ni(III), presumably associated with oxygen loss in the active materials, which act as obstacles to Li intercalation/deintercalation.