Vehicle-to-Grid (V2G) Technology

Vehicle-to-Grid (V2G) technology refers to a system where electric vehicles (EVs) achieve bidirectional energy flow with the power grid via dedicated charging and discharging infrastructure. Under V2G mode, EVs are no longer merely electricity consumers; they act as flexible grid regulation units—charging to store energy during off-peak hours and feeding electricity from onboard battery packs back to the grid during peak demand periods. This technology turns a vast fleet of EVs into "mobile energy storage units", transforming car owners from passive energy consumers into active "prosumers" who participate in grid peak shaving.

Working Principle and Technical Architecture

Deploying V2G requires seamless synergy between hardware and software. On the hardware front, it relies on bidirectional chargers—unlike conventional "one-way" charging points, V2G chargers feature both rectification and inversion capabilities: converting AC grid power to DC to charge the battery, and "inverting" DC battery power back to AC to feed into the power grid during discharge. On the software side, an Energy Management System (EMS) serves as the central dispatch brain: calculating available discharge capacity at the vehicle level based on driving schedules and battery health, while monitoring grid loads in real time to coordinate charging and discharging schedules across thousands of EVs simultaneously.

The technology continues to advance into higher-tier applications. "Grid-forming" V2G chargers represent the cutting edge, offering not only bidirectional energy exchange but also the ability to independently establish a microgrid during sudden grid outages. This enables off-grid emergency power supply, functioning effectively as "mobile smart microgrid stabilisers".

Core Value and Application Scenarios

The strategic value of V2G spans four key dimensions. Grid load relief: Optimising the distribution network load curve via "peak shaving and valley filling" can effectively defer or eliminate the need for costly distribution grid capacity upgrades. Facilitating renewable energy uptake: EVs can charge during peak wind and solar generation windows and discharge during high-demand hours, smoothing out renewable energy output curves. Generating owner returns: By capitalising on peak-to-trough tariff differentials, owners can profit financially through "buying low and selling high". Emergency backup power: In the event of sudden blackouts, EVs can serve as emergency power sources to keep critical household or community facilities running.

Several V2G pilot projects are currently underway across China. In April 2025, Chengdu, Sichuan achieved the province's first reverse discharge from an EV into a 10 kV public grid, earning the owner RM25 in tariff differential for a single session. In summer 2025, Guangzhou and Foshan completed the country's largest vehicle-grid interaction trial, involving 4,026 new energy vehicles responding to a peak load of 25,000 kW, netting owners a collective RM38,000 in electricity fee earnings over two days. Meanwhile, State Grid Chongqing has built 209 bidirectional charging and discharging stations, with V2G points cumulatively discharging over 400,000 kWh.

Business Models and Revenue Pathways

Vehicle-grid integration generates value for stakeholders primarily through four revenue streams. Time-of-use tariff arbitrage is the most straightforward route: charging during off-peak periods (as low as RM0.20 to RM0.40/kWh) and discharging during peak hours (reaching RM1.00 to RM4.50/kWh), netting anywhere from several ringgit to dozens of ringgit per session. Demand response programmes allow owners to receive incentives for discharging on grid demand—a vehicle owner in Deqing, Zhejiang earned RM150 from a single 50 kWh discharge session. Ancillary services markets aggregate charging points to provide frequency regulation, spinning reserves, and other grid support services for settlement revenue. Furthermore, V2G unlocks value through green electricity trading and carbon credits, with cities like Shanghai and Wuhan exploring frameworks to incorporate EV charging and discharging into personal carbon offset schemes.

Policy Support and Industry Progress

V2G technology is at a pivotal turning point, transitioning from pilot demonstrations to commercial-scale adoption. In April 2025, four state authorities, including the National Development and Reform Commission (NDRC), unveiled the first batch of 9 pilot cities and 30 demonstration projects for vehicle-grid integration. China's 15th Five-Year Plan explicitly sets a target to achieve approximately 50,000,000 kW in aggregated adjustable V2G charging capacity by 2030. At the municipal and provincial levels, Guangdong plans to install over 2,500 V2G points by late 2027, while Shanghai has set up a dedicated incentive fund offering V2G projects RM50/kW per year for grid regulation capacity.

Across the industry, carmakers and battery manufacturers are stepping up their rollouts. BYD has completed V2G compatibility testing across its entire vehicle lineup; GAC's V2G microgrid has commenced trial operations, with an annual discharge volume projected to surpass 1,500,000 kWh in 2026; NIO is leveraging its proprietary battery swapping network to participate routinely in grid frequency regulation services. Meanwhile, CATL is partnering with carmakers like VOYAH to accelerate integrated V2G deployment.

Challenges and Bottlenecks

Despite its potential, mass V2G commercialisation faces several hurdles. High hardware costs remain the main barrier—V2G charging points currently cost 2 to 3 times more than standard AC/DC chargers, dampening operator interest due to hefty upfront capital expenditure. Battery degradation concerns also hinder consumer adoption, with surveys showing 58% of EV owners worry that frequent V2G cycles will accelerate battery wear. Fragmented industry standards—notably discrepancies in vehicle-to-charger communication protocols and battery management interfaces—hinder interoperability. In addition, the lack of well-defined settlement mechanisms and electricity retail policies for residential-to-grid discharge continues to impede mass rollout across high-potential private residential and strata communities.

Future Outlook

Industry forecasts indicate that China's new energy vehicle fleet will reach 150,000,000 units by 2030, which could unlock 30GW of peak shaving capacity via V2G—equivalent to 30 gigawatt-scale pumped-storage hydropower stations. As V2G hardware costs fall, battery cycle life improves (industry leaders are developing dedicated cells with over 8,000 cycles), and electricity market mechanisms mature, EVs will evolve from basic transport into vital nodes of the energy internet. In turn, vehicle owners toggling seamlessly between "consuming" and "selling" electricity will become genuine participants and beneficiaries of the green energy transition.