Vehicle-to-Grid (V2G) Market Size, Share & COVID-19 Impact Analysis, By Service (Time Shifting, Frequency Response & Reserve, Distribution Services, Emergency Backup, Arbitrage), By Application (Commercial, Individual, Both), By Charger (DC, AC, Both), and Regional Forecast, 2023– 2030

The global vehicle-to-grid market size was valued at USD 10 million in 2022. The market is projected to grow from USD 11.3 million in 2023 to USD 59.2 million by 2030, exhibiting a CAGR of 26.6% during the forecast period.

Vehicle-to-Grid (V2G) technology enables an electric vehicle to supply power back to the grid. By implementing this technology, batteries in electric vehicles can serve as a means of power storage and supply power whenever required. This technology utilizes bidirectional charging stations to supply and extract electricity to and from electric vehicles based on necessity. The stored energy can power houses, commercial and & industrial buildings.

In vehicle-to-grid technology, the charging stations must be equipped with software capable of communicating with the central power grid to understand the supply-demand balance and provide power at any given time. It can make power distribution more efficient by easing the strain on the system. Expanded storage capacities within the V2G system can pave the way for renewable energy storage. Moreover, this technology will aid in cost stability by balancing supply and demand dynamics.

COVID-19 IMPACT

 COVID-19 Pandemic Restrictions Induced Strain on Vehicle-to-Grid Ecosystem

The outbreak of COVID-19 led to travel restrictions, quarantines, and facility shutdowns, negatively impacting the global economy. Leading aggregators such as Nuvve did not experience direct supply chain disruptions. However, various charging station manufacturers witnessed longer lead times during the acquisition of critical parts & components, leading to delays in grid integration projects. The spread of COVID-19 has disrupted the manufacturing, delivery and overall supply chain of charging station manufacturers. As lockdown restrictions were lifted, the market regained normalcy and gained momentum.

LATEST TRENDS

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Supportive Government Initiatives and Policies to Augment Market Growth

Governments worldwide are focusing on implementing Vehicle-to-Grid technology for several reasons, such as grid stability, renewable energy integration, cost saving, job creation, and energy independence. For this purpose, the governments of several countries are focused on developing and increasing the adoption of grid technology. Significant investments are being made in the sector, and various policies have been drafted to promote vehicle to grid technology integration.

For instance, in November 2022, the EV Smart Charging and V2G Trial Programme, established by the government of South Australia, signed a partnership with Sunverge and ENGIE. Under this partnership, Sunverge and ENGIE will deploy a V2G virtual power plant (VPP) to support Flinders University's electric vehicle business fleet. Wallbox Quasar bi-directional EV charging systems, most of which will be aggregated to utilize the grid technology services, and the remaining used for fast-charging EV solutions will be used in this project. This contributes to ongoing vehicle-to-grid market trends, which boosts the growth of the technology during the forecast period.

DRIVING FACTORS

Rise in Adoption of Electric Vehicles to Drive the Market Growth

Rapid acceleration in adopting electric vehicles on the road would significantly impact the requirement for electricity network capacity and smart grid technology. With EVs being one of the green modes of transportation noticed by society and the government, the sale of electric vehicles is expected to boom during the forecast period. This, in turn, drives the demand for grid technology to maintain the grid capacity and prevent power shortages. According to International Energy Agency (IEA), the sales of battery electric vehicles BEVs and plug in hybrid electric vehicles PHEVs are expected to reach 106.4 million units by 2050, thus propelling the market growth.

Recently, many people are shifting towards adopting electric vehicles for efficient, clean, and sustainable environmental factors. Environmental concerns regarding vehicle pollution and climate change have increased the demand for electric vehicles.

A total number of 6.6 million electric cars were registered in 2021, accounting for 16.5 million electric cars on the road. According to IEA, with the Net Zero Emissions protocol by 2050, the organization foresees the volume of electric cars fleet to over 300 million in 2030, with 60% new car sales registration. The above-mentioned key factors will generate the need for smart grid infrastructure, thereby driving the global market size.

Environmental Concerns and Technological Advancement Augment the Market Growth

With the development of V2G technology and the introduction of more advanced features, the charging and discharging of electric vehicles will become easy to use. With the help of advanced software tools, the user can control the charge and discharge amount, maintaining the battery capacity required for day-to-day activities. With the software, the user could locate nearby electric vehicle charging points and control the home area network through its mobile application. This will drive the market growth of vehicle-to-grid during the forecast period.

Integrating the vehicle to grid in electric vehicles lowers the vehicle's ownership cost. The owners of the vehicles could charge their vehicles during the off-peak hours with lower rates and can revert the energy back to the grid during the peak hours. The recharge schedule will minimize the generation cost, including production cost and vehicle to grid discharge payment. Moreover, the Fuel Cell Electric Vehicle (FCEV) owners can also earn by selling excess energy generated by their vehicles back to the grid. This drives the demand for vehicle to grid technology in fuel cell electric vehicles.

The concern of several countries' governments, regulatory authorities and the populace towards air pollution and global warming has increased. This resulted in the people and governments shifting towards adopting green energy. Since electric vehicles run on green energy, the populace is inclined to adopt electric vehicles instead of conventional vehicles that run on petrol or diesel fuels. Thus, due to the environmental factor, the demand for vehicle to grid is expected to drive market growth during the forecast period.

RESTRAINING FACTORS

Battery Degradation Concerns Limits the Market Growth

It is considered that the use of vehicle batteries for grid support can lead to accelerated degradation of the battery, which may limit the lifetime and overall value of the vehicle. Although the cost of production of batteries is decreasing, it contributes 40% of the total cost of the vehicle. Battery degradation concerns may hamper the market growth during the forecast period.

The most preferred battery in electric vehicles is the Lithium-ion battery which has a high energy density strength of over 220Wh/kg. Research held at Aston University School of Engineering and many other organizations shows that Lithium plating, Solid Electrolyte Interphase (SEI) growth, and chemical decomposition occur as microscopic phenomena for battery degradation. The SEI is considered as the primary process for battery degradation.

The SEI is generated on the anode's surface, resulting in the electrolyte's electrochemical reduction. It is essential to provide long-term cyclability of a lithium-ion battery. The SEI is a passivation layer that formulates when a liquid electrolyte comes into contact with a negative electrode's electron-conductive surface (NE). Thus, it has the properties of a solid electrolyte. These electrochemical reactions designate a reduction of the battery capacity, thus degrading the battery life of electric vehicles.

Two perspectives are used to calculate battery degradation – 1) Calendar Ageing and 2) Cycle Ageing Mechanisms. Calendar Ageing refers to the gradual degradation of the battery's performance and capacity over time, even when the battery is not in use. Cycle ageing refers to the gradual degradation of the battery's capacity and performance over time as a result of repeated charging and discharging cycles. The calendar ageing and cycle ageing tests are used to estimate the battery's lifespan and provide warranty coverage accordingly.

However, According to the research conducted by the University of Warwick, the utilization of vehicle to grid for charging and discharging electric vehicle batteries does not necessarily harm the performance and capacity of the battery over time; otherwise, it may increase its life span. The research was conducted by running simulations with the help of a comprehensive battery degradation model. The modelling results showed that if the daily drive cycle consumes a range between 21% and 38% state of charge, and then discharging 40% to 80% of the batteries state of charge to the grid minimizes capacity fade by approximately 6% and power fade by 3% across a period of three months. The smart-grid formulation is able to reduce power fade by 12.1% and EV battery pack capacity fade by up to 9.1%. This could help in the long-term growth of the market.

SEGMENTATION

By Service Analysis

Time shifting Segment will Dominate the Market Growth During the Forecast Period

Based on service, the market is classified into time shifting, frequency response & reserve, distribution services, emergency backup and arbitrage. In time shifting, electric vehicle owner uses their electric vehicles to shift the time at which they consume electricity. Electric vehicle users can charge the vehicles at low prices and then discharge vehicles during periods of high prices. This will aid in cost reduction of overall energy and increase self-consumption of on-site renewable energy. Due to this, the market is expected to grow during the forecast period.

By Application Analysis

Rising Need for Vehicle to Grid Infrastructure will Propel the Growth of the Commercial Segment

Based on application, the market is bifurcated into commercial, individual and both. Supportive government policies and rising investments in grid integration will augment the growth of commercial vehicle to grid in future. In 2021, Northern Power Grid Project was successfully completed in the U.K. to understand the network impact of grid-integrated vehicles. This commercial project is aimed to study the positive and negative impacts of grid charging-enabled vehicles on the distribution network. Moreover, it will also analyze customer usage behavior. A total of 16 chargers of 3-phase 10kW DC chargers are installed in this project. Similarly, the re-dispatch vehicle to grid project introduced in Germany focuses on analysing electric vehicles' dispatch ability to reduce curtailment and manage network constraints.

By Charger Analysis

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Fast Charging Benefits of DC Charging will Trigger the Segment's Growth

Based on charger, the market is categorized into DC, AC and both. In DC charging stations, the speed of charging and discharging is faster than in AC charging stations. During DC charging, a degrading charging curve is formed as electric vehicles' battery initially accept a quicker flow of power but gradually requires low power as it reaches full capacity. However, DC charging stations require more space and complex parts to facilitate various critical processes. Increasing demand for rapid charging for long-distance travel will augment the growth of DC charging stations over the next few years.

REGIONAL ANALYSIS

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The market is analyzed across North America, Europe, Asia Pacific, and the Rest of the World region.

Europe is expected to spearhead the growth of the market within the forecast period. Many important projects are expected to commence in the U.K., Germany, Netherlands and Switzerland during the next few years. In Switzerland, the V2X Suisse project is anticipated to be completed in 2023. In this project, 50 Honda electric vehicles will be deployed for a year across 40 mobility stations in Switzerland. Bidirectional charging will be used and tested by propel across rural and urban areas. This one-year test will serve as a benchmark for future V2G integration projects in Switzerland.

In the Netherlands, Direct Solar V2G Hub Project is being established at the headquarters of Mijndomein in Lelystad. A total of 14 chargers, 10 DC V2G chargers (10 kW each) and 2 AC double socket chargers will be installed within this project. These electric vehicle supply equipment will be connected to the PV panels on the building and solar carport. A total of 100,00 kWh will be generated per year by these panels. This project will provide various services, including frequency response, distribution services, time shifting and emergency backup.

Asia pacific market witnessed substantial demand due to the significant increase in the adoption of electric vehicles (EVs). Moreover, several governments in the region, such as China, Japan, and South Korea, have launched initiatives to promote the adoption of EVs and vehicle to grid technology. This led to increased investment and research into the technology. All these factors propel the market growth.  

KEY INDUSTRY PLAYERS

Companies are Collaborating and Forming Partnerships to Achieve Competitive Advantage

Vehicle-to-Grid market is at a nascent stage, and many players are eyeing the opportunity to gain a strong foothold in the market. These players are collaborating and forming alliances with other players in the market. In October 2021, Nuvve Holding Corp. signed a collaboration with Wallbox Chargers to develop and provide a bidirectional V2G incorporated D.C. charger in Iberia. Under this partnership, Wallbox's pioneering hardware- Quasar, a bidirectional D.C. charger, will be incorporated with Nuvve's V2G software technology, GIVe.

List of Key Companies Profiled:

• Nuvve Holding Corp. (U.S.)


• E.ON U.K. plc (U.K.)


• ABB Ltd. (Switzerland)


• Honda Motor Co., Ltd. (Japan)


• Enel Spa (Italy)


• The Mobility House GmbH (Germany)


• Mitsubishi Electric Corporation (Japan)


• Virta Global (Finland)


• Ovo Energy (U.K.)


• Flexitricity (Scotland)

KEY INDUSTRY DEVELOPMENTS:

• December 2022 – Toyota announced that it will set a pilot plant in the U.S. to persuade V2G technology. This project will be run in partnership with the Texas electric transmission and distribution group Oncor. With the help of , the Toyots aims to increase its position in the  electric vehicle market with the adoption of the latest advanced technologies.


• In December 2022 − The South Australia government approved the use of V2G technology. Customers can apply to SAPN to install a Wallbox Quasar V2G unit. JET Charge provided the shipment of Wallbox Quasar V2G chargers in late January 2023. This has helped the grid technology market to grow in the South Australian market.


• July 2022 – Nuvve signed a partnership with the San Diego Gas & Electric to prevent blackouts through Emergency Load Reduction Program (ELRP). Under this partnership, Nuvve will help reduce constraints on California's energy grid. The electric bus fleets equipped with vehicle to grid charging technology, with the help of the GIVe platform, will provide energy back to the grid that will fulfil the energy need during emergency load reduction events.


• April 2022 – Porsche and Hyundai signed a partnership to develop and conduct a test on V2G technology. As part of a pilot project by Porsche, five Taycan models of series production were connected to the power grid with the help of the Porsche Home Energy Manager (HEM). The project was conducted in both a laboratory and a domestic environment.


• January 2021 – E.ON signed a partnership with Nissan and Imperial College to focus on the development of bidirectional V2G technology integrated charging solutions for commercial fleet. The project is known as e4future, and it is funded by the Office for Zero Emission Vehicles (OZEV) and Department for Business, Energy and Industrial Strategy (BEIS) in collaboration with Innovate U.K., part of U.K. Research and Innovation.

REPORT COVERAGE

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The report provides a detailed analysis of this market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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