Abstract The high manufacturing cost of vanadium electrolytes is caused by the sluggish kinetics of V 4+ to V 3+ , which restricts the commercialization of all vanadium flow batteries (VFBs). Here, density functional theory calculations first reveal the detailed reaction pathway and point out the rate‐determined step by the desorption of the end product [V(H 2 O) 6 ] 3+ . Catalytic site engineering at the molecular level can optimize the adsorption energy of [V(H 2 O) 6 ] 3+ to boost the kinetics. Furthermore, iron single‐atoms embedded nitrogen‐doped carbon nanotubes (FeSA/NCNT) are designed to decrease the adsorption energy of [V(H 2 O) 6 ] 3+ . The reaction rate constant of FeSA/NCNT toward V 4+ to V 3+ is 1.62 × 10 −7 cm s −1 , 37.5 times that of the commercial carbon catalyst. Therefore, the energy consumption is reduced by 22.5%. Meanwhile, the prepared vanadium electrolyte is of high quality with the ideal oxidation state of + 3.5 without impurities. This work reveals the catalytic mechanism of V 4+ to V 3+ and proposes a simple but practical strategy to reduce the preparation cost of V 3.5+ electrolyte.