A facile synthesis of vanadium oxide with reduced graphene oxide (rGO) is developed and used as cathode material for lithium ion batteries. VO2(B) nanorods and VO2(B)-rGO composite were prepared by a hydrothermal method using NaVO3 precursor and sodium oxalate as a reducing agent. The monoclinic phase and nanorod like morphology of synthesized materials were confirmed by XRD, SEM, and TEM respectively. The electrochemical properties of samples were investigated at 1.5–4.0 V, and 0.1 C rate, and the VO2(B) nanorods exhibit reversible capacity of about 159 mAh g−1, whereas VO2(B)-rGO exhibits 274 mAh g−1. The reasonable discharge capacities were obtained at high rates. The enhanced performance in electrical energy storage system reveals the effectiveness of rGO in the composite, as it enhances the conductive electron pathway to overcome the intrinsic limits of single phase VO2(B).