Subtle structural changes during electrochemical processes often relate to the degradation of electrode materials. Characterizing the minute-variations in complementary aspects such as crystal structure, chemical bonds, and electron/ion conductivity will give an in-depth understanding on the reaction mechanism of electrode materials, as well as revealing pathways for optimization. Here, vanadium pentoxide (V₂O₅), a typical cathode material suffering from severe capacity decay during cycling, is characterized by in-situ X-ray diffraction (XRD) and in-situ Raman spectroscopy combined with electrochemical tests. The phase transitions of V₂O₅ within the 0–1 Li/V ratio are characterized in detail. The V–O and V–V distances became more extended and shrank compared to the original ones after charge/discharge process, respectively. Combined with electrochemical tests, these variations are vital to the crystal structure cracking, which is linked with capacity fading. This work demonstrates that chemical bond changes between the transition metal and oxygen upon cycling serve as the origin of the capacity fading.