The vehicle to grid (V2G) technology market size was valued at USD 8.58 billion in 2023 and is expected to grow by USD 135.89 billion at a CAGR of around 35.93% from 2024 to 2033.
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Vehicle-to-grid (V2G) technology represents a pivotal innovation in the realm of sustainable energy management, leveraging the capabilities of electric vehicles (EVs) to not only consume electricity but also serve as active participants in the broader energy ecosystem. At its core, V2G transforms EV batteries into dynamic energy storage units, capable of both drawing power from the grid and injecting surplus electricity back into it as needed. This bidirectional flow of energy is facilitated through sophisticated bi-directional charging stations, which serve as the nexus between EVs and the central energy grid.
The implications of V2G technology are profound and multifaceted. It presents a compelling solution to the perennial challenge of energy storage, effectively harnessing the latent capacity of EV batteries to store excess energy during periods of low demand and release it during peak consumption times. By essentially turning parked EVs into decentralized energy reservoirs, V2G offers a scalable and flexible approach to grid management, mitigating strain during peak load periods and bolstering overall grid stability and resilience.
Beyond its immediate benefits for grid management, V2G holds tremendous promise for advancing the integration of renewable energy sources into the mainstream energy infrastructure. By enabling EVs to serve as conduits for renewable energy generated from sources like solar and wind, V2G technology helps bridge the gap between intermittent renewable generation and consistent energy demand. This symbiotic relationship not only enhances the reliability and sustainability of the energy grid but also accelerates the transition towards a cleaner, greener energy future.
The proliferation of V2G technology is contingent upon a robust ecosystem of infrastructure and regulatory support. Bi-directional charging stations equipped with sophisticated software interfaces are essential components, enabling seamless communication between EVs and the central grid while ensuring efficient energy exchange. However, challenges persist, including the lack of standardized designs for V2G infrastructure and the limited availability of bi-directional charging equipment. Moreover, the complexity and cost associated with adapting existing payment systems to accommodate bi-directional energy transactions pose additional hurdles to widespread adoption.
To address these challenges and drive forward the adoption of V2G technology, concerted efforts are underway across both public and private sectors. Collaborative initiatives, such as the partnership between L&T Construction Power Transmission and Distribution Business and IIT Indore, exemplify the commitment to advancing research and development in renewable energy and technology management. Similarly, pilot projects like Canada's first V2G drive for medium- and heavy-duty EVs, spearheaded by BC Hydro, underscore the practical applications and real-world benefits of V2G technology in enhancing energy resilience and sustainability.
As awareness and understanding of V2G technology continue to grow, fueled by ongoing education and outreach efforts, the trajectory of the vehicle-to-grid market is poised for significant expansion. By overcoming technological barriers, fostering innovation, and fostering collaborative partnerships, V2G stands to revolutionize the way we think about energy consumption and distribution, ushering in a new era of smart, sustainable energy management.
The COVID-19 pandemic has negatively impacted the global economy by leading to travel restrictions, quarantines and lockdowns. Mass leaders like Nuvve did not experience direct supply chain disruptions. However, many manufacturers have a long lead time in the supply process of essential products, causing the connection plan to be delayed. The outbreak of COVID-19 has disrupted production, transportation and the entire supply chain for which manufacturers must pay. Once the lockdown restrictions were lifted, things returned to normal and are gaining momentum.
The evolution of vehicle-to-grid (V2G) technology is poised to transcend its origins within the electric vehicle (EV) domain, branching out to explore novel applications that extend beyond traditional automotive contexts. This expansion into new realms of storage and energy production represents a paradigm shift, unlocking a wealth of opportunities for enhancing network management and bolstering energy infrastructure support.
One notable example of this trend is the groundbreaking V2G initiative launched by Polestar in Gothenburg, Sweden, in November 2023. With backing from the Swedish innovation agency Vinnova, Polestar embarked on a pioneering endeavor to harness the potential of V2G technology on a grand scale. Collaborating with key stakeholders in the grid sector, including Svenska Kraftnât, Vattenfall Eldistribution, and local utility Göteborg Energi Nât, Polestar deployed a sizable fleet of Polestar 3 vehicles to explore innovative V2G business models and leverage actionable data insights. This initiative not only underscores the versatility of V2G technology but also demonstrates its capacity to catalyze collaborative innovation across diverse industry sectors.
Governments worldwide are also recognizing the transformative potential of V2G technology, driven by a myriad of compelling motivations ranging from grid stability and connectivity innovation to cost savings and job creation. Consequently, policymakers are spearheading initiatives to foster the development and adoption of V2G technologies, laying the groundwork for a future marked by enhanced energy independence and sustainability.
A poignant illustration of governmental commitment to advancing V2G technology is the smart electric vehicle charging and V2G pilot program initiated by the South Australian state government in November 2022. Leveraging cutting-edge bi-directional EV charging technology, such as the Wallbox Quasar system, this initiative exemplifies the symbiotic relationship between V2G and renewable energy integration, driving forward the evolution of the V2G market and fostering its continued growth in the foreseeable future.
As the boundaries of V2G technology continue to expand and intersect with adjacent domains of energy production and storage, the stage is set for a transformative journey towards a more resilient, interconnected energy ecosystem. By embracing collaboration, innovation, and forward-thinking policy frameworks, stakeholders across the globe stand poised to unlock the full potential of V2G technology, ushering in an era of unprecedented sustainability and energy independence.
The rapid electrification of roads heralds a transformative shift in transportation and energy landscapes, with profound implications for grid capacity and the burgeoning demand for smart energy infrastructure. As electric vehicles (EVs) increasingly emerge as the preferred mode of transportation, both individuals and governments are embracing their environmental benefits, catalyzing a surge in EV adoption and fueling demand for advanced grid technologies to sustainably manage energy demand and prevent grid overload.
The allure of electric vehicles lies not only in their efficiency but also in their environmental friendliness, offering a cleaner alternative to traditional combustion engine vehicles and addressing pressing concerns such as vehicle pollution and climate change. This heightened awareness of environmental issues, coupled with advancements in EV technology and infrastructure, has spurred a remarkable uptick in EV sales worldwide.
According to projections by the International Energy Agency (IEA), the sales of battery electric vehicles (BEVs) and rechargeable hybrid electric vehicles (PHEVs) are poised to skyrocket, reaching a staggering 106.4 million units by 2050. This exponential growth trajectory underscores the pivotal role of EVs in the transition towards a greener, more sustainable transportation paradigm.
Indeed, the momentum of EV adoption is palpable, with the total number of electric vehicles registered in 2021 already reaching 6.6 million and the number of EVs on the roads swelling to 16.5 million. However, these figures are just the tip of the iceberg, as projections indicate a seismic shift in the automotive landscape in the coming decades.
The IEA anticipates that following the landmark net zero emissions agreement signed by many nations, the number of electric vehicles is poised to exceed 300 million by 2030, with a significant proportion-60%-comprising newly sold vehicles. This unprecedented surge in EV adoption underscores the imperative for robust, forward-thinking strategies to accommodate the burgeoning demand for smart energy solutions.
As the global economy pivots towards a more sustainable trajectory, the demand for smart energy projects is poised to skyrocket, driven by the intersecting forces of technological innovation, environmental stewardship, and economic imperatives. Smart grid technologies, energy storage solutions, and grid management systems will play a pivotal role in orchestrating the seamless integration of electric vehicles into the energy ecosystem, ensuring grid stability, resilience, and sustainability in the face of burgeoning demand.
The electrification of roads represents not merely a mode of transportation but a catalyst for transformative change, reshaping the fabric of our energy infrastructure and propelling us towards a future defined by sustainability, efficiency, and resilience.
With the development of V2G technology and the emergence of higher efficiency, charging and discharging electric vehicles will become easy and convenient. Through advanced software tools, users can manage charging and discharging to maintain the battery capacity required for daily activities. Thanks to the software, users can find nearby electric vehicle charging points and manage their home network through the mobile application. This will cause the car-to-license plate market to grow during the forecast period.
Incorporating the car-to-grid approach into electric vehicles could reduce vehicle costs. Vehicle owners can charge their vehicles at a lower rate during off-peak hours and send electricity back to the grid during peak hours. The payment method will reduce production costs, including production costs and vehicle costs for the grid. FCEV (FCEV) owners can also make money by selling excess electricity from their vehicles back to the grid. This has increased the demand for electric vehicles for Internet of Vehicles technology.
Concerns about air pollution and global warming have increased among governments, regulators and citizens in some countries. This has caused people and governments to turn to green energy.
Since electric cars use green energy, people prefer electric cars instead of cars that use gasoline or diesel. Therefore, the demand for grid-connected vehicles due to environment is expected to drive the market growth during the forecast period.
Using car batteries to support the grid is expected to cause rapid battery discharge, which can limit the service life and overall cost of the vehicle. Although the production cost of the battery has decreased, it still constitutes 40 percent of the total cost of the car. Battery degradation issues will hinder the growth of the market during the forecast period.
The most popular battery in electric cars is the lithium battery with energy consumption over 220Wh/kg. Research by Aston University's School of Engineering and other organizations has shown that lithium plating, solid electrolyte interface (SEl) growth and chemical degradation are the main causes of battery problems. SEl is considered the main process of battery degradation.
SEl forms on the anode surface and causes electrochemical reduction of the electrolyte. It is important to ensure the long-term performance of lithium batteries. SEl is a passivation layer formed when the liquid electrolyte comes into contact with the electron-conducting surface (NE) of the negative electrode. Therefore, it has electrolyte properties. This electrochemical reaction can reduce battery capacity and therefore shorten the battery life of electric vehicles.
Battery degradation is calculated from two aspects -
1) Calendar Aging
2) Cyclic Aging Mechanisms.
The old calendar is inferior to the performance and capacity of the battery over time, even if the battery is not used. Cycle aging refers to the degradation of battery capacity and performance over time due to repeated cycles and discharges. Calendar burn-in and cycle burn-in tests are used to estimate battery life and provide warranty coverage accordingly.
However, using the car to charge it and leaving the car battery on the grid over time will not increase the operation and capacity of the battery; Otherwise, it will extend its life, according to research by the University of Warwick. The study was carried out by running simulations with the help of damaged battery models. Demonstrations show that capacity loss can be reduced to approximately 6% and power loss can be reduced if the daily driving cycle uses 21% to 38% of the charge state and then discharges 40% to 809% of the battery's charge state for the grid. . minimally. 3 percent growth in three months. Smart grid design can reduce power derating by 12.1%, and electric car battery pack can realize up to 9.1% derating.
The vehicle-to-grid (V2G) market is poised for significant evolution, with one-way charging emerging as a dominant segment, projected to capture over 65% of the market share by 2023. This growth trajectory is underpinned by the capacity of one-way charging to enhance grid security and facilitate the seamless integration of renewable energy sources. By allowing electric vehicles (EVs) to draw power from the grid during off-peak periods, one-way charging optimizes costs and grid efficiency, thereby bolstering balance and supporting renewable energy integration efforts.
Moreover, one-way charging offers utilities invaluable tools to manage demand, mitigate peak consumption, and fortify the sustainability of the energy ecosystem. By leveraging one-way charging, utilities can optimize grid operations, enhance stability, and foster widespread acceptance of V2G technology, laying the groundwork for a resilient and sustainable energy future.
In tandem with the rise of one-way charging, the pure electric vehicle segment is poised to dominate the vehicle-to-grid market, capturing approximately 55% of market share by 2023. This prominence can be attributed to the growing adoption of battery electric vehicles (BEVs) equipped with V2G capabilities, which enable these vehicles to play a dual role in energy efficiency.
Equipped with V2G capability, BEVs not only draw power for charging but also contribute excess power back into the grid during periods of high demand. This bidirectional functionality enhances the versatility of BEVs, effectively transforming them into mobile power units that can actively participate in grid stabilization efforts.
As the global community intensifies efforts to reduce carbon emissions, pure electric vehicles powered by V2G technology emerge as pivotal players in stabilizing the grid, fostering greater energy connectivity, and driving innovation across diverse applications. Their ability to contribute to grid stability and compatibility renders them indispensable in the transition towards a more sustainable and electrified transportation landscape, thereby enhancing their appeal and relevance in the evolving automotive ecosystem.
The European vehicle-to-grid (V2G) technology market is poised for significant expansion, projected to capture a substantial 40% share of revenue by 2023. This dominance is attributed to Europe's robust energy culture and a proactive approach to sustainable practices, bolstered further by government policies and incentives driving the adoption of electric vehicles (EVs) and the integration of V2G systems. The concerted efforts to invest in smart projects, coupled with heightened awareness of security measures and environmental concerns, have accelerated the pace of V2G technology implementation across the region.
A key driver of success in this ecosystem lies in the collaborative efforts among automakers, utilities, and regulators, fostering a conducive environment for V2G adoption and bolstering the overall health of the European economy. The market analysis spans across various regions, including North America, Europe, Asia Pacific, and other global areas, with Europe poised to lead economic growth in the foreseeable future.
Significant projects are slated for implementation in pivotal European countries such as England, Germany, the Netherlands, and Switzerland. Noteworthy among these is the V2X Sulse project in Switzerland, slated for completion by 2023. Under this initiative, 50 Honda electric vehicles will be deployed annually across 40 locations in Switzerland, with Propel spearheading the implementation and testing of two-way payment systems in both rural and urban areas. This comprehensive evaluation over the course of a year is expected to serve as a blueprint for future V2G integration efforts in the region.
In the Netherlands, the Direct Solar V2G Center project, led by Mindomen's headquarters in Lelystad, represents a significant step towards sustainable energy solutions. The initiative entails the installation of 14 chargers, including 10 DC V2G chargers and 2 AC dual-socket chargers, all interconnected with photovoltaic panels in buildings and solar-powered parking lots. With a combined annual production of 100.00 kWh, these energy-efficient devices will offer a range of services, including frequency response, distribution services, time shifting, and emergency backup, thus contributing to grid stability and resilience.
Meanwhile, the Asia Pacific market has witnessed substantial demand driven by the rising adoption of EVs, with governments in countries such as China, Japan, and South Korea actively promoting the use of electric vehicles and V2G technology. This has spurred increased investment and research into V2G technology, underscoring its pivotal role in driving economic growth across the region.
Nissan Motor Company and Mitsubishi Motors Corp. are key players with notable revenue streams within the vehicle-to-grid (V2G) technology market. Nissan Motor Company is strategically engaged in collaborating with utilities, energy firms, and technology entities to establish partnerships to develop and deploy V2G infrastructure and related services. This proactive approach underscores Nissan's commitment to leveraging synergistic alliances to drive the evolution of V2G technology, aligning with its broader vision for sustainable transportation solutions.
On the other hand, Mitsubishi Motors Corp. is directing its efforts toward expanding the market presence of V2G-enabled electric vehicles (EVs). Recognizing the growing interest and support for transportation and intelligent solutions across pivotal global markets, Mitsubishi is actively promoting the adoption of V2G technology by enhancing the capabilities of its electric vehicle lineup. In addition to advancing V2G-enabled EVs, Mitsubishi is also contributing to developing electronic payment systems, including two-way payment facilities. These initiatives are designed to optimize the efficiency and effectiveness of V2G services for Mitsubishi electric car owners, further solidifying the company's position as a leading advocate for sustainable mobility solutions.
Major companies operating in the vehicle-to-grid (V2G) technology industry are
Toyota Motor North America (Toyota) and San Diego Gas & Electric Company (SDG&E)
Ford Motor Company
General Motors (GM)
Volkswagen Group
During the forecast period, the market growth for vehicle-to-grid (V2G) technology will be largely dominated by the transition time segment. Transition time refers to the duration during which electric vehicle (EV) owners utilize their vehicles as part of the V2G ecosystem, charging them when electricity prices are low and discharging them when prices are high. This practice not only helps reduce overall energy costs but also promotes the self-use of renewable energy, thus driving market expansion.
The market analysis by application reveals a significant uptick in demand for vehicle-to-grid residential solutions, leading to substantial growth within this market segment. With increasing government investment in policy support and integration efforts, the connected car sector is poised for exponential growth. A notable example is the British Northern Power Grid project completed in 2021, which aimed to assess the impact of grid-charging enabled vehicles on distribution lines. This initiative, comprising the installation of 16 three-phase 10kW DC chargers, underscores the pivotal role of research and development in shaping the future of V2G technology.
The review from charger perspective delineates the burgeoning importance of fast charging, particularly through DC charging stations. Unlike AC charging stations, DC charging stations offer faster charging and discharging capabilities, making them indispensable for EV owners, especially during long journeys. Despite requiring significant space and infrastructure, the convenience and efficiency offered by DC charging stations position them for substantial growth in the years to come, catalyzing the expansion of the V2G market.
As the V2G ecosystem continues to evolve, driven by innovations in transition time optimization, residential applications, and fast charging infrastructure, the market is poised for robust growth. With governments and industry stakeholders increasingly recognizing the transformative potential of V2G technology, the stage is set for a dynamic future characterized by sustainable energy management and grid resilience.
By Component
By Charging Type
By Vehicle Type
By Application
By Geography
Adriel Mergulhao is a distinguished professional renowned for his expertise in consulting, market research, and primary market analysis. With over the year of experience, Adriel has solidified his position as a senior solution advisor, providing invaluable insights to numerous clients across diverse industries. His proficiency in primary market research methodologies allows him to uncover deep-seated consumer preferences and trends, empowering businesses to make strategic decisions confidently.
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