In conclusion, our study presents and applies a meso-scale chemo-mechanical constitutive model for investigating the effect of grain-level chemo-mechanics on the electrochemical performance and degradation mechanisms in composite cathodes of solid-state batteries. Integrating multi-scale experimental and theoretical findings, we reveal that Ni-rich cathodes experience extensive dislocation formation (over 12% plastic shear locally) during discharge, due to the large compositional strains, crystalline anisotropy, and non-equilibrium Li-ion intercalation dynamics. Anisotropic diffusion within the a-b plane, coupled with the high Li diffusivity sensitivity to Li content, lead to the heterogeneous Li distribution within cathodes, causing a marked increase in over-potential and capacity loss. Accumulated dislocations on the cathode periphery induce large lattice strain and profoundly alter the local oxygen environment, potentially triggering oxygen release and the displacement of transition metal ions into the alkali metal layers. The formation of crystal defects in the bulk of cathode particles driven by Li intercalation can not be alleviated by the established surface coating and modification approaches. Strategies such as reducing the secondary particle diameter to below 4 µm, using single crystal cathodes without interparticle boundaries, and compositionally complex doping, prove effective in countering the generation of crystal defects and addressing capacity fading in conventional polycrystalline cathodes.