The electrochemical properties of layered rock salt cathode materials are strongly influenced by defects. The three most common defects in LiNiO₂-based compounds, namely extra Ni, Li–Ni anti-site and oxygen vacancy defects have been investigated. The calculated defect formation energies are very low in LiNiO₂, consistent with the difficulty in synthesizing stoichiometric defect-free LiNiO₂. A systematic study is conducted to examine the effect of Co, Mn and Al substitution on defect formation. It is shown that the presence of Ni²⁺ in the Li layer can be rationalized using ideas of superexchange interactions. In addition, a correlation between oxygen vacancy formation energy and oxygen charge is noted. This explains the better thermal stability obtained by early transition metal or Al substitutions.