Vehicle-to-grid technology could turn electric vehicles into energy storage for the grid

Vehicle-to-grid (V2G) technology allows electric vehicles to store electricity and feed it back to the grid during periods of peak demand. It is part of the broader Vehicle-to-Everything (V2X) ecosystem, which also includes Vehicle-to-Building (V2B) and Vehicle-to-Grid (V2G). A related trend, Vehicle-to-Home (V2H), is gaining momentum as bidirectional charging capabilities become more common.

How V2G works and why it matters

V2G enables EVs to function as mobile storage and distribution assets, delivering electricity to the grid when needed. The approach is designed to improve energy efficiency across the power system. However, because EVs are often viewed as a climate-friendly solution, large-scale overnight charging could also create grid stability challenges if not managed carefully.

UK pilots and commercial rollout

The UK’s first V2G pilot began in 2018 with 330 vehicles. Owners were paid 30 pence per kilowatt-hour (kWh) for electricity sold back to the grid. Octopus Energy now manages charging for more than 350,000 cars.

Octopus said it uses detailed data on when owners return home, how much energy remains in the battery, electricity demand, and when drivers need to leave. That information feeds into a scheduling solution that calculates grid conditions, wholesale prices, and other factors to determine when vehicles should charge and discharge.

In 2024, Octopus launched its first V2G package in the UK. Last year, it partnered with Chinese EV maker BYD to offer a “free” charging package. Users install Octopus’ app and plug in their EV overnight. The software charges the vehicle when electricity prices are low and discharges back to the grid when needed.

The company said that if an owner plugs in 20 times per month for 12 hours each time, revenue from selling electricity nearly offsets charging fees.

US initiatives

In the United States, clean-energy utility Sunrun partnered with Baltimore Gas and Electric to launch the first residential V2G plant program last year. Two months earlier, Tesla began a pilot with a utility in the Houston–Dallas metro area. The only Tesla model equipped with V2G is the Cybertruck.

In the UK, Tesla also received authorization from Ofgem in March to retail surplus electricity from EVs and solar panels.

Costs, emissions, and grid balancing

Supporters of V2G say load balancing can reduce costs and emissions for the wider economy. Schneider eStar’s Vincent Bellone said that during peak hours, the grid will draw energy from polluting plants such as coal. Charging EVs when cleaner electricity is plentiful and discharging during peak times can reduce demand for dirty and expensive power.

Outlook for adoption and targets

Hyundai’s Woong Tae Hwang, Vice President and head of EV energy strategy, said V2X is expected to become widespread by 2030. He argued that the technology could increase EV appeal by turning vehicles into energy assets for households when needed. Hyundai currently offers V2H on the Ioniq 9 and Kia EV9, with plans to expand to other models.

Key obstacles to scaling

Despite growing interest, adoption remains limited due to several barriers:

• Infrastructure requirements: bidirectional chargers are needed, and installations must meet grid connection and local safety requirements, including automatic disconnection protections.
• Standards and protocols: growth is hindered by the lack of universal standards for EV chargers and two-way charging protocols.
• Limited compatible vehicles: the number of EVs with V2G capability remains small, reducing the potential user base and slowing integration.

Where progress is fastest

Markets with large EV fleets and advanced technology may have an advantage. China, for example, launched V2G pilots in nine major cities last year, including Beijing, Shanghai and Shenzhen, aiming to balance supply without relying on fossil-fuel power plants.

What experts say is needed to expand participation

To widen adoption, experts emphasized simpler measurement and payment methods, streamlined grid-connection procedures, and transparent approvals to make it easier for households to participate. They also said the regulatory framework needs to become more market-oriented.

One example cited from the UK is that when utilities sell electricity to households, they add grid-operating costs; however, when users sell electricity back to the grid, those charges are not reimbursed.

Battery-life concerns and evidence

Fortune Business Insights highlighted a common concern that automatic charging and discharging could degrade battery life. However, a 2022 study from the University of Warwick found that charging and discharging with a smart grid can extend battery life by up to 12%, even with higher activity.

The study’s discussion included practical reasons to preserve battery life, such as keeping batteries at room temperature and avoiding full charge or full discharge. It also noted that smart grids using machine learning can collect data such as weather and travel patterns to decide charging and discharging in real time, potentially extending battery life beyond normal charging.

Standards and interoperability

Barriers to international standards are gradually being addressed. Safety protocols such as ISO15118 for vehicle-to-grid communication between vehicle and charger (for both AC and DC charging) and the Open Charge Point Protocol (OCPP) between chargers and management software support smart charging and standardized networks. This can allow a single charger to operate across platforms.

Industry view

Octopus Energy’s Schoch said V2G is the future, adding that an EV in the UK could store enough energy for a household for a week. He also noted that when the UK reaches 10 million EVs on the road, the fleet could provide more power than the nation’s peak demand.