A novel modification approach for LiNi0.5Co0.2Mn0.3O2 material was investigated in this work. Scanning electron microscopy (SEM), transmission electron microscopy (TEM) and energy dispersive X-ray spectroscopy (EDS) confirmed that the coating/blending structure had been constructed successfully by adding Cr8O21 to parent cathode material LiNi0.5Co0.2Mn0.3O2 via a planetary ball milling method. Charge-discharge tests showed that the irreversible capacity loss decreases from 23.9 to −2.4 mAh/g as the content of Cr8O21 increases from 0 to 7.5 wt% in the composite cathode materials. Such decrease could be attributed to the addition of Cr8O21, which served as lithium insertion oxide to hold the Li+ that could not be inserted back into the LiNi0.5Co0.2Mn0.3O2 during initial cycle. In addition, charge-discharge tests demonstrated the composite cathodes presented improved cycling capability and rate performance compared to the bare NCM523. Electrochemical impedance spectroscopy (EIS) results implied that the increase of capacity retention and rate performance could be mainly attributed to the coating layer, which suppressed the increase in impedance upon cycling by inhibiting the electrolyte/electrode parasitic reaction.