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In this article, we discuss the origin of an optical effect in lithium iron phosphate (LFP) battery cathodes, which depends on the electrical charge transferred into the battery. Utilizing indium tin oxide (ITO) as an electrode additive, we were able to observe a change in reflectivity of the cathode during charging and discharging with lithiation and delithiation being clearly visible in the form of lithiation fronts. Further investigations using in situ video microscopy and in situ Raman spectroscopy on test cells with an optical window indicate that ITO additionally acts as an electrochromic marker within the LFP cathode. This enhances the optical effect due to local potentials around the lithiation fronts, which enables the voltage-dependent reflectivity of the ITO to be visible in the LFP cathode. Structural analysis with scanning electron microscopy and X-ray crystallography is presented as well. The observed effect allows for novel battery research methods and for a possible commercial application as a sensor for state-of-charge estimation.