This study looks into the impact of Ni2+ ions as an electrolyte impurity on the electrochemical performance of NMC811 electrodes. The results indicate that the presence of Ni impurities in the electrolyte increases the polarization, primarily at the oxide-electrolyte interface. The influence on the metallic lithium counter electrode and the electrolyte conductivity can be neglected. The Ni impurities induce the formation of high impedance CEI layers on the oxide electrode, affected by both cations and anions of the impurity and impeding the current flow and cell performance. Ni impurities also enhance electrochemical side reactions, especially oxidation of the electrolyte, diminishing both, the Coulombic efficiency during cycling and the practical specific charge. The rates of these side reactions are related to the Ni2+ ion concentration. C-rate tests confirmed that a contaminated electrolyte reduces the practical specific charge due to the increased interfacial impedance of the CEI, especially at high discharge rates. The cycling performance of NMC811 electrodes in contaminated electrolytes showed that Ni impurities, especially NiCO3, promoted capacity fading during cycling and increased cell polarization. To optimize the performance of NMC-based oxide electrodes, controlling the concentration of Ni ions in the electrolyte is critical.