The integration of renewable energy into the power grid has intensified the need for reliable, large scale energy storage to mitigate intermittency. Vanadium redox flow batteries (VRFBs) are a promising solution due to their long cycle life, rapid response, and operational safety. However, their widespread deployment remains limited by high capital costs, largely driven by stringent electrolyte purity requirements. Currently, the absence of well-defined impurity tolerance limits necessitates the use of high-purity vanadium electrolytes to minimise potential adverse effects, thereby increasing production costs. In practice, impurities may originate from vanadium-bearing feedstocks during extraction or from system component degradation during battery operation. These impurities may affect electrolyte stability, electrochemical kinetics, and overall battery performance. An alternative approach to reduce electrolyte costs is the utilisation of lower-grade vanadium sources; however, this requires a clear understanding of the effects of impurities inherent in these materials. This study investigates the impact of key transition metal impurities on VRFB electrolyte performance using cyclic voltammetry, electrochemical impedance spectroscopy, and charge-discharge testing. The results demonstrate that impurity concentrations above critical thresholds reduce electrochemical reversibility, increase cell resistance, and promote side reactions, ultimately decreasing the battery’s energy efficiency. Building on these findings, the study explores direct electrolyte production from vanadium-bearing leach liquors by applying identified impurity tolerance limits to ensure acceptable performance. The approach reduces the need for extensive purification, thereby lowering processing complexity and electrolyte production costs.