Li-ion batteries (LIBs) today face the challenge of application in electrified vehicles (xEVs) which require increased energy density, improved abuse tolerance, prolonged life, and low cost. LIB technology can significantly advance through more realistic approaches such as: i) stable high-specific-energy cathodes based on Li Ni Co Mn O (NCM) compounds with either Ni-rich (x = 0, y → 1), or Li- and Mn-rich (0.1 < x < 0.2, w > 0.5) compositions, and ii) chemically active separators and binders that mitigate battery performance degradation. While the stability of such cathode materials during cell operation tends to decrease with increasing specific capacity, active material doping and coatings, together with carefully designed cell-formation protocols, can enable both high specific capacities and good long-term stability. It has also been shown that major LIB capacity fading mechanisms can be reduced by multifunctional separators and binders that trap transition metal ions and/or scavenge acid species. Here, recent progress on improving Ni-rich and Mn-rich NCM cathode materials is reviewed, as well as in the search for inexpensive, multifunctional, chemically active separators. A realistic overview regarding some of the most promising approaches to improving the performance of rechargeable batteries for xEV applications is also presented.