We have devised an approach to fabricate dense textured V2O5 thin films, which allows us to scrutinize the root cause of capacity fade in V2O5 cathodes of Li-ion batteries. Specifically, we performed in-situ measurements of stress of V2O5 thin films during 50 electrochemical cycles. Surprisingly, electrochemical cycling appears to induce elastic and rate-independent deformation over a voltage range relevant to battery operation (4 - 2.8 V). However, the compressive stresses gradually increase with cycle number during the first few cycles, likely due to side reactions and/or residual Li left in the V2O5, even after delithiation (to 4 V). Further cycling leads to accumulated mechanical (e.g., fracture, delamination) and structural changes which ultimately result in severe capacity fade.