X-ray photoemission spectroscopic and high-resolution hard X-ray photoemission spectroscopic studies of positive electrodes in LiNi0.73Co0.17Al0.10O2 and hard carbon based batteries were carried out to elucidate the mechanism of battery degradation. Li2CO3, hydrocarbons, ROCO2Li, polycarbonate-type compounds and LiF were observed on positive electrode surfaces and the amount of carbonates was found to have increased after cycle testing. Above 60 degrees C, signs of electrolyte decomposition were indicated. Near the surface of the positive electrodes, a Li-deficient cubic phase is present and grows with degradation. Capacity and power fade could be related to the amount of species on the surface and the thickness of the Li-deficient cubic phase near the surface. (C) 2007 Elsevier B.V. All rights reserved.