The energy density of LiNi0.5Co0.2Mn0.3O2 (NCM523) can be enhanced by increasing the upper-limit charging potential, but it exhibits a significant “capacity decay” during cycling. Therefore, it is necessary to study the intrinsic mechanism for the performance improvement of high-voltage NCM523. In this work, through combining the intrinsic state-of-charge (SOC) of NCM523 revealed by Raman spectroscopy with the electrochemical characterization, the kinetic degradation of Li+ de-/intercalation is found to be a key factor for the apparent capacity decay of NCM523 under the high upper-limit charging potential (>4.3 V). Meanwhile, the apparent capacity loss can be restored significantly by reducing the current density or increasing the operating temperature. Furthermore, the formation of the electrochemical passivation layer on the surface of NCM523 particles is detected by the surface characterization of high-resolution transmission electron microscopy (HR-TEM) and X-ray photoelectron spectroscopy (XPS), which is proved to be another important factor for the kinetic degradation, besides the particle pulverization of NCM523 and the decomposition products of electrolyte adsorbed on the material surface. Thus, this work can help to rationally improve the electrochemical performance of the high-voltage NCM523.