Vehicle-to-grid technology

The rollout of EVs is a major driver of global electricity demand growth. Residential EV charging can draw more power than any other single household load, including heating, cooling, lighting and appliances. In addition, driving and charging patterns can concentrate demand in time, creating highly variable and difficult-to-predict loads that can lead to congestion and voltage issues in distribution networks. As power systems in many regions simultaneously integrate higher shares of variable renewable generation, maintaining the balance between electricity supply and demand becomes increasingly complex and costly.

EVs offer substantial demand side flexibility via smart charging. Beyond this, vehicle‑to‑grid (V2G) technology enables EVs to provide grid‑stabilisation services through bidirectional power flow. Realising this potential, however, requires widespread deployment of V2G‑compatible vehicles and chargers, multiparty interoperable communication protocols, as well as supportive testing regimes, regulatory frameworks, and financial incentives.

Through controlled charging and discharging, EV batteries become flexible assets for energy storage rather than mere loads to the grid. There are varying degrees of flexibility. With unidirectional smart charging (V1G), the charging power can be modulated to align electricity demand with generation profiles or to alleviate grid congestion. With vehicle-to-building (V2H/V2B), the EV can additionally discharge energy for use in a home or building, either to serve as a backup during power outages or to lower electricity bills by leveraging dynamic tariffs and increasing self-consumption of rooftop solar. Finally, V2G technology can push energy from the EV battery into the power grid, unlocking the greatest potential for grid stabilisation and cost optimisation. Another form of bidirectionality is vehicle‑to‑load (V2L), where devices such as tools, appliances, and electronics can be powered or charged using the EV’s battery through an alternating current (AC) outlet.

Enabling bidirectional charging introduces additional technical requirements for EVs. In particular, it affects the design and operation of battery management systems (BMS), power electronics and communication protocols, all of which must ensure safe delivery of outgoing current and strict compliance with grid requirements applicable to generators. In AC V2G systems, where the EV inverts the battery’s direct current (DC) to AC, the vehicle’s onboard power electronics are responsible for grid compliance, necessitating additional functionalities such as grid-frequency measurement. In DC V2G configurations, by contrast, these responsibilities are handled by the external charger. Battery management systems must ensure safe discharge while accurately enforcing state-of-charge and temperature limits to minimise degradation resulting from increased cycling. In addition, enhanced communication protocols are required, as EVs must convey not only charging constraints but also discharge limits and cycling parameters to the charger.

The charging station management system (CSMS), also known as the backend, functions as the communication interface between charger and grid, and as the main platform for data management and charging optimisation. It receives grid-side signals such as capacity constraints, time-of-use tariffs and requests for load shift, as well as vehicle‑side information, including state‑of‑charge limits, cycling constraints and expected departure time. Based on these inputs, the CSMS calculates optimal charging schedules and transmits control commands back to the charger. In current commercial approaches, the backends are mostly run by aggregators as part of a packaged service to the EV owner.

Flexibility enables fewer grid investment costs

With V2G technology, EVs become flexible assets to the grid and can serve as energy storage. While EVs with unidirectional smart charging can also contribute to demand flexibility, as can other end-use devices such as heat pumps in buildings, the potential of bidirectional charging of EVs is exceptional.

Quantifying and comparing the flexibility potentials of different technologies is a complex task. The content in this section of the report relies on analysis conducted by researchers at RWTH Aachen University on a specific case study of the flexibility potential of different technologies. This compares EVs with V1G and V2G, sampling driving and charging behaviour from the Mobility in Germany survey; from a battery energy storage system; and from an air-to-water heat pump used for space heating in an average German home, where flexibility arises from a buffer storage tank and a 0.5°C tolerance on the setpoint temperature in the building.

The results show that EVs with V2G technology have the largest hourly energy flexibility of all technologies considered. The large battery capacity of EVs combined with the possibility to discharge opens wide theoretical corridors for load shifting and grid balancing. EVs with V1G show more limited flexibility than battery energy storage systems with much smaller energy capacity. This is because the flexibility potential for V1G depends on the state-of-charge when cars get plugged in. High state-of-charge of the EV at arrival, which in the sample used is around 88% on average, limits the flexibility potential. For space heating heat pumps, the flexibility potential depends strongly on the weather. During winter, heat pumps can be a potent source of load flexibility, but the effect diminishes quickly as heating demand drops in the warmer months1.

Potential reductions in grid investments through smart charging deployment are highly dependent on existing grid capacity and characteristics. A study on the impacts of EV deployment on the distribution network of San Francisco found that V2G charging could avoid three-quarters of transformer overloads by 2050 compared to uncontrolled charging, and half compared to unidirectional smart charging. A study on the German power grid predicted an up to 6% reduction in distribution grid investment costs to 2040 with grid-friendly V2G compared to uncontrolled and cost-optimised smart charging. Considerable investments in the distribution grid were found to be necessary in all scenarios due to rollout of heat pumps and EVs; more sparsely populated regions saw comparably higher savings through grid-friendly charging. A study focused on a region in northern France found that V1G and V2G deployment could reduce 2040 peak loads on grids by 6% and 9%, respectively. Around one-quarter of yearly grid reinforcement costs could be saved compared to a case with low EV charging flexibility. The grid in this region has comparably high capacity due to the widespread use of electric domestic heating in France.

Smart charging can reduce generation and transmission capacity investments by reducing peak power demand as well as renewable curtailment. A study on two regions in China found that V2G can substantially reduce generation capacity investment costs, and this is especially true in regions with high renewable shares. Analysing the optimal buildout of European charging infrastructure, another study found that V1G can provide substantial energy system cost savings compared to uncontrolled charging (2-5%). The additional benefits from V2G are most prevalent under transmission grid expansion constraints and high shares of solar PV in electricity generation. Another study across various European countries found similar savings, largely attributable to the reduced capital expenditure on flexible generation capacity.

Incentivising load shifting through static time-of-use tariffs can, however, lead to a large share of EVs charging or discharging at the same time, exacerbating grid impacts compared to uncontrolled charging. With various forms of co-ordination such as dynamic tariffs, local grid-aware control, or aggregator control, it is possible to flatten load curves on distribution grids and potentially reduce the need for upgrading power lines and transformers.

Additional revenue streams improve the economic proposition of EVs

EV owners can be remunerated for providing flexibility to the gridcontributing to system balancing, thus improving the economics of EV ownership and potentially accelerating adoption. The possible revenue streams include energy arbitrage, ancillary services, and distribution level services. Through V2G technologies, EV owners can engage in energy arbitrage, meaning charging the vehicle battery when electricity prices are low (often during periods of high renewable generation) and discharging energy back into the grid when prices are high. Through participation in ancillary services, EV owners are remunerated for flexibly adjusting charging or discharging to assist grid operators in maintaining frequency stability. At the distribution level, EV owners can be remunerated for shifting their load or providing power to alleviate local network congestion. Under bilateral contract or flexibility tenders, they also can assist with restoring power after a fault.

There are several market and remuneration mechanisms for EV owners to stack revenue. Depending on the domain of intervention, either at transmission or distribution level, EV charging flexibility may directly access wholesale and ancillary services markets (usually through aggregation), or local flexibility markets, and dedicated tariffs.

Estimates of revenues for EV owners participating in V2G charging range between several hundred to over USD 1 000 more than USD 1 000 per year. Current commercial offerings promise customer benefits of up to USD 770, through free charging or through remuneration for every hour the EV is plugged in. In these examples, charging is managed by a utility functioning as aggregator that interacts with energy and ancillary services markets. Revenues from selling ancillary services such as voltage regulation are seen as key for near-term profitability, whereas returns for these services are expected to decline with increasing deployment of V2G.

V2G model availability is growing but still remains limited

While the number of models with V2G charging capabilities has seen rapid growth over the last 2 years, these models remain scarce and mostly not capable of multiparty interoperability. Counting OEM statements and models commercially used for V2G, 22 models have V2G capabilities today, accounting for less than 1.5% of all EV models. When accounting for all bidirectional capabilities, i.e. including V2H and V2L-capable models, the value is at least three times higher. Despite producing over half of EV models globally, Chinese OEMs only account for one of the models with commercialised V2G capabilities, which is used in one of the first V2G offers available to private EV owners worldwide, in the United Kingdom. The range of available models span different size classes and prices, from small cars like the Renault Twingo, to large SUVs like the Hyundai Ioniq 9 or Tesla’s Cybertruck, with prices ranging from under USD 25 000 to over USD 70 000.

Early V2G deployments were based on CHAdeMO, which enabled the first commercial bidirectional charging systems, but usage is now declining outside Japan. Among other current charging ecosystems, only the Combined Charging Standard (CCS), via ISO 15118-20, defines a fully standardised V2G communication pathway, while the Chinese GB/T supports V2G mainly through partial, system-integrated implementations. The North American Charging Standard (NACS) is still relatively new, with V2G capabilities not yet fully specified. However, V2G was not part of the original communication standard used in CCS (ISO 15118-2:2014) and was only added in 2022. This partly explains why only a few OEMs have specified models as being V2G-capable as of today, even though other models have been used in pilot projects. On the other hand, it is possible that more models could be enabled for V2G through over-the-air software updates in the future, similar to Volkswagen activating V2H for some models in 2024.

On the charger side, the situation is similar, with few models on the market but many more announced. Prices vary considerably between AC and DC chargers. Whereas bidirectional AC chargers are available for less than USD 1 500, DC chargers can cost USD 5 000 and upwards. Considering a benefit to the EV owner of around USD 500 per year, payback periods for installing a bidirectional charger at home vary from about 2 years for AC chargers to up to 10 years for DC chargers. V2G chargers must be both certified for the grid codes of each country and able to communicate with EV models.

Despite the standardisation of the CCS communication protocol for V2G in ISO 15118-20, interoperability between chargers and EVs is currently extremely low, as implementation of the new standard varies considerably between OEMs. All current commercial offerings are packages comprising specific EV models, specific chargers, and a tariff offered by a specific utility.

Regulatory advances have enabled the first commercial V2G offers in Europe

The rollout of V2G hinges on the establishment of a regulatory and electricity market framework that enables market players to deploy the technology needed to untap the benefits of flexible loads.

Some of the key regulatory features required include differentiated tariffs, market access for aggregated loads, ancillary services market access and local flexibility procurement. Differentiated tariffs (e.g. time-of-use, dynamic real-time, critical peak pricing, locational signals) are varying tariffs, giving the EV owner price signals and allowing for implicit demand side flexibility (DSF)2. Allowing EVs to participate in the provision of ancillary services (voltage support, frequency control, and emergency and restoration plans) supports the operation of the transmission or distribution system. Lastly, opening local flexibility procurement to EVs can help reduce congestion and thereby minimise the risk of outages and the need for expansion investments.

Over the past year, there has been significant progress across many regions on the necessary legal frameworks for V2G. Building on mature frameworks, the first‑ever commercial V2G offerings appeared, mostly in Europe. Aggregation of EV charging for grid balancing and providing ancillary services has been enabled in Finland, France and Denmark. The Brazilian electricity market reform in 2025 enables the development of aggregators and differentiated tariffs, while Thailand has established policy sandboxes to enable vehicle-to-grid pilot projects.

European countries are currently leading the rollout of V2G. All the necessary conditions for V2G are currently met in France, the Netherlands and the United Kingdom, and commercial V2G offerings are available in those countries. Germany eliminated double grid fees for bidirectional charging points at the end of 2025, paving the way for the appearance of the first commercial offers shortly after. The European Union has also defined minimum requirements for all new chargers from 2027, including bidirectional capability and ISO 15118-20 support.

V2G deployment has entered the pilot stage in many countries, notably in China

Pilots and pre-commercial deployment of V2G are now gathering pace across many regions. In China, while aggregation and parts of the communication protocols are still under development, the government has set ambitious V2G deployment targets. This included announcing 30 pilot projects across 9 cities in 2025, and targeting the deployment of 5 000 V2G charging facilities by the end of 2027. A barrier to full commercialisation of V2G in China is that bidirectional charging protocols for the GB/T standard have not yet been fully standardised. Similarly, higher-level communication protocols between the charger, aggregator and grid are today proprietary or altogether absent.

Pilots and pre-commercial deployment of V2G are gathering pace across many regions. In 2026, the National Electric Energy Agency (ANEEL) in Brazil authorised a V2G pilot project, enabling the use of V2G billing through aggregation with the use of EVs, solar power generation and energy storage systems. In Korea, Hyundai Motor Group is leading a AC V2G pilot project aligning with a recent grid-code update proposal by the Korean Electric Power Corporation (KEPCO). One of Australia’s largest utility providers is trialling a limited V2G subscription bundle including a BYD Atto 3, a bidirectional charger and a dedicated tariff.

Communication standards exist but implementation is currently inconsistent

The international communication standard enabling bidirectional power transfer between EVs and chargers with CCS connectors, ISO 15118-20, was published only in 2022, amended in the following years, and has not yet been implemented consistently and universally. The current version of the standard leaves manufacturers room for different interpretations of various aspects and features. Currently available V2G offers are therefore limited to one (or few) EV models – and one charger–model pairing, using proprietary communication protocols. Test procedures to ensure conformity with ISO 15118-20 and multiparty interoperability across EV and charger brands are still under development, notably by Task 53 of the IEA’s Electric Vehicles Technology Collaboration Programme. Policy support should favour multiparty interoperable solutions when available, to foster customer choice and competition among vehicles, chargers and aggregator platforms.

In addition, regional differences between grid codes and regulations mean that EVs and chargers might only be able to engage in V2G charging in one country or region. This is compounded by standardisation gaps in linking grid signals through grid operator and aggregator to EV-charger communication. This explains why today’s commercial V2G offers do not yet extend beyond a single country and are tied to a specific utility. Harmonising grid codes and improving standardisation of communication links, as proposed by UNECE, could facilitate global interoperability of EVs, chargers and energy market actors.

Advanced battery management systems maximise the economic value of V2G operations

One of the main concerns with V2G raised by customers and OEMs in the past has been accelerated battery degradation through increased cycling. However, recent testing and modelling shows that battery degradation in V2G applications can be limited effectively while providing revenue to the EV owner through grid services.

Well-managed V2G can even reduce capacity loss compared to unmanaged charging. Degradation of battery performance is due to a combination of calendar ageing, which strongly depends on the average state-of-charge, and cyclic ageing, which increases disproportionally with cycling depth and when approaching upper and lower charge limits. Compared to uncontrolled charging, where the battery is charged as soon as possible, the average state-of-charge is normally lower in V1G and V2G applications, counteracting the effect of increased cycling.

OEMs seek to limit the risk of warranty costs while EV owners need clarity that V2G revenues outweigh any loss of value due to battery degradation. Typical warranties on EV batteries today guarantee 70% capacity retention after 8‑10 years or 160 000 driven kilometres. Increased battery usage due to V2G therefore poses a financial risk to OEMs, who currently seek to mitigate these risks through various measures. As discussed above, many models today only allow V2L and/or V2H/B instead of V2G, where cycling is normally limited. Where V2G is enabled, OEMs seek control over V2G operations by requiring approved or proprietary chargers and by limiting energy throughput. A key component for scaling up V2G lies in the deployment of battery management systems with integrated predictive degradation models, which allow for more accurate cost‑benefit optimisation during V2G operations, and increased customer confidence.