Vehicle-to-Grid (V2G)

Vehicle-to-Grid (V2G) refers to utilising an electric vehicle’s traction battery as a mobile, distributed energy storage unit, enabling bidirectional energy exchange between the EV and the power grid via bidirectional charging technology. When grid demand is low, the vehicle draws power from the grid (Grid-to-Vehicle, G2V); during peak electricity demand, the vehicle feeds stored battery power back into the grid, effectively serving to "shave peaks and fill valleys". This technology elevates new energy vehicles from mere "electricity loads" to dual-function "storage + supply" assets, serving as a pivotal technology in the development of modern power systems.

Working Principle and System Architecture

The operation of a V2G system relies on a seamless "vehicle-charger-grid" ecosystem, anchored by core hardware comprising bidirectional EV chargers and on-board bidirectional inverters.

Bidirectional Energy Flow: Conventional EV chargers only support one-way power transfer from the grid to the vehicle. In contrast, V2G integrated charge-discharge units feature built-in bidirectional AC-DC and DC-DC converters to actively regulate power flow. During charging, the system indicates positive power draw, while during discharging, a negative reading is displayed, confirming that the vehicle is exporting power back to the grid.

Intelligent Dispatch Hub: Decentralised electric vehicles are aggregated and managed via Virtual Power Plant (VPP) technology. Taking Hefei as an example, by pooling mobile micro-assets such as EVs and battery energy storage systems, the total adjustable capacity reaches 400,000 kW—equivalent to the output of a conventional thermal power plant. The VPP monitors grid loads in real time and precisely manages every discharging vehicle, pooling individual resources to deliver massive collective grid support.

Key Use Cases and Monetisation Models

V2G primarily creates financial returns for EV owners through peak-to-trough tariff arbitrage, charging at off-peak rates and discharging during peak periods. Key implementation scenarios currently include:

Residential Communities: EV owners charge during off-peak night hours (e.g., deep off-peak tariffs in Shandong drop to as low as 0.222 yuan/kWh) and discharge during evening peak windows (where real-time tariffs can exceed 1 yuan/kWh). A car owner in Shandong discharged a cumulative 167.5 kWh in July, netting a profit of 78 yuan. In Shanghai, some users have even achieved negative monthly electricity bills via V2G participation.

Public Charging Hubs: EV owners without access to dedicated home wallboxes can participate via public V2G charging stations. In the Guangzhou pilot programme, cumulative discharged energy has surpassed 1.6 million kWh, with daily owner earnings reaching over 200 yuan, yielding China’s first residential individual V2G billing settlement.

Industrial Parks: The GAC Hyper industrial park has established China’s largest commercial V2G demonstration hub, delivering a single-station discharge capacity of 3.72 MW and an average daily discharge of 11,000 kWh.

Industry Landscape and Future Outlook

V2G technology is currently navigating a pivotal transition from "pilot trials" to "large-scale commercialisation".

Robust Policy Backing: In April 2025, four Chinese state authorities, including the National Development and Reform Commission, announced the initial rollout of V2G pilot schemes across 9 cities and 30 flagship projects. The "15th Five-Year Plan for Modern Energy Systems" released in June 2026 set a clear target to reach 50 million kW of aggregated, dispatchable V2G capacity by 2030.

Carmakers Ramp Up Rollout: BYD confirmed it has mastered native V2G technology and is ready to deploy it across its entire vehicle portfolio based on market demand. GAC has introduced three V2G-ready models, including the Hyper GT and Hyper HT, with projected annual discharged energy exceeding 1.5 million kWh in 2026. Meanwhile, NIO is supporting grid frequency regulation by pairing battery swap stations with V2G capabilities.

Substantial Economic Potential: According to calculations by Ouyang Minggao, an academician at the Chinese Academy of Sciences, a standard passenger vehicle retains around 2,500 surplus battery charge-discharge cycles over its operating lifecycle. Participating in grid energy storage and power trading could yield approximately 150,000 kWh in total traded volume, translating to an estimated lifecycle return of around RM15,000 based on a tariff differential of 0.1 yuan per kWh.

Key Challenges and Bottlenecks

While the technical foundation is largely established, the mainstream adoption of V2G still faces several hurdles:

Consumer Acceptance: Around 72.7% of EV users express concern over battery degradation caused by frequent discharging. However, real-world test data indicates that two SAIC EV models exhibited a battery degradation rate of merely 0.13% after 80 full charge-discharge cycles. Nevertheless, a disconnect remains between lab testing data and consumer perceptions.

Evolving Business Models: Current electricity tariff structures do not yet fully reflect the time-and-location scarcity of power assets, leading to weak supply-demand pricing signals and hindering the establishment of a proven, commercially sustainable business model.

Standards and Infrastructure: Bidirectional V2G chargers remain costlier than standard AC and DC EV chargers. Furthermore, communication protocols across vehicles, chargers, and the grid require universal standardisation, meaning full-scale rollout will depend on more cohesive regulatory frameworks and technical standards.