Ni-rich LiNi0.8Co0.1Mn0.1O2 layered oxide cathodes have been highlighted for large-scale energy applications due to their high energy density. Although its specific capacity is enhanced at higher voltages as Ni ratio increases, its structural degradation due to phase transformations and lattice distortions during cycling becomes severe. For these reasons, we focused on the origins of crack generation from phase transformations and structural distortions in Ni-rich LiNi0.8Co0.1Mn0.1O2 using multiscale approaches, from first-principles to meso-scale phase-field model. Atomic-scale structure analysis demonstrated that opposite changes in the lattice parameters are observed until the inverse Li content x = 0.75; then, structure collapses due to complete extraction of Li from between transition metal layers. Combined-phase investigations represent the highest phase barrier and steepest chemical potential after x = 0.75, leading to phase transformations to highly Li-deficient phases with an inactive character. Abrupt phase transformations with heterogeneous structural collapse after x = 0.81 (~220 mAh g−1) were identified in the nanodomain. Further, meso-scale strain distributions show around 5% of anisotropic contraction with lower critical energy release rates, which cause not only micro-crack generations of secondary particles on the interfaces between the contracted primary particles, but also mechanical instability of primary particles from heterogeneous strain changes.