Revitalized attention in cost-effective vanadium pentoxide (V2O5) to ensure high-performance next-generation lithium-ion batteries (LIBs) via an easy synthesis protocol, with increased capacity, and two-dimensional (2D) Li-ion transportation pathways, results in a higher power capability than for one-dimensional (1D) migration pathway cathodes, such as LiFePO4. V2O5 has pride of place as a maximum reversibility cathode amongst other cathode materials and overcomes the obstacle of high energy density for LIBs by the evolution of different phases according to the degree of lithium intercalation. The four phase transformations of α ↔ ε, ε ↔ δ, δ ↔ γ, and γ ↔ ω, according to the Li-insertion numbers, can have different equilibrium potentials vs. Li, which is worth mentioning. Furthermore, this 2D-layered structure attains the theoretical capacity of 147 mA h g−1 in the limited 1 mol Li-insertion, which is comparable to the performance of LiFePO4 in terms of both working potential and capacity. Excess Li-intercalation leads either to large polarization or induces structural destruction, which makes this fascinating cathode unfit for potential applications. Although there are a few review articles available on V2O5-based cathodes, no reports exist on the fabrication of full-cells using this cathode. This review pays particular attention to the recent improvements in V2O5-based LIBs paired with different kinds of anodes, namely insertion, conversion, and alloying types. Challenges in the development of V2O5-based LIBs that would help to achieve advanced batteries in future, especially limiting 1 mol Li-ion intercalation to enable a promising candidate, are also discussed.