"Market Intelligence for High-Geared Performance"
The global vehicle-to-grid (V2G) market size was valued at USD 11.39 million in 2023. The market is projected to grow from USD 14.19 million in 2024 to USD 116.53 million by 2032, exhibiting a CAGR of 30.1% 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 (V2G) 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.
Supportive Government Initiatives and Policies to Augment Market Growth
Governments worldwide are focusing on implementing vehicle-to-grid (V2G) 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 January 2024, China's National Development and Reform Commission (NDRC) issued a directive on the establishment of initial technical standards to direct the integration of new energy vehicles into the grid by 2025. According to the NDRC, by the year 2030, new energy vehicles are projected to constitute a significant portion of the country's energy storage infrastructure. One approach to manage the peak power demand involves incentivizing vehicle charging during non-peak hours, such as late at night, through pricing signals. Another strategy involves 'bidirectional' charging, encouraging vehicle-to-grid (V2G) charging, where EV owners sell excess battery power back to grid operators during peak hours.
The NDRC plans to initiate more than 50 pilot programs in regions with relatively mature conditions for vehicle-grid integration, including the Yangtze River Delta, the Pearl River Delta, Beijing, Sichuan, and Chongqing. Chinese authorities regard the integration of EVs into the power system as a crucial measure to prevent power networks from becoming overwhelmed during periods of surging electricity demand. Thus, the support of government in the adoption of vehicle to grid technology is anticipated to boost the market growth over the upcoming period.
Request a Free sample to learn more about this report.
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 vehicle-to-grid (V2G) 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.
According to the International Energy Agency (IEA), a total number of 14 million electric cars are expected to be sold, representing a year on year growth of 35%. 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 vehicle-to-grid (V2G) 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 (V2G) 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.
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 vehicle-to-grid (V2g) 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 vehicle-to-grid (V2G) market.
Aging Infrastructure and Rising Electrical Grid Demand fuels the Frequency Response And Reserve Segmental Growth
Based on service, the market is classified into time shifting, frequency response & reserve, distribution services, emergency backup, and arbitrage.
The time shifting segment dominated the market in 2023. Time shifting allows energy stored in electric vehicle (EV) batteries to be used during peak demand periods when electricity prices are typically higher. By shifting the usage to off-peak hours, EV owners can take advantage of lower electricity rates, benefiting both the grid and the consumers. In February 2024, Nissan, a leading Japanese automaker known for its pioneering efforts in the electric vehicle (EV) transition, is set to introduce Nissan Energy Share in Japan. This proprietary energy management technology enables users to regulate the charging and discharging of EV batteries. Targeted primarily at corporations, businesses, and local governments, Nissan Energy Share offers intelligent control over EV vehicles and fleets' energy management. Employing bidirectional charging technology, it enables power utilities to coordinate charging schedules to minimize grid impact. Users ranging from individuals to fleet managers can optimize charging times to take advantage of cheaper electricity rates or contribute stored energy from their EVs to the grid, functioning akin to a virtual power plant. This fuels the growth of the segment over the forecast period.
The frequency response and reserve segment is attributed to grow at the fastest CAGR over the forecast period. Aging infrastructure and increasing demand on the electrical grid necessitate modernization efforts. V2G technology can be integrated into grid modernization initiatives to provide dynamic and responsive solutions for frequency regulation and reserve capacity. These factors boost the market growth over the assessment period.
Financial Incentive Boost the Individual Segment Growth
Based on application, the market is bifurcated into commercial, individual, and both.
The individual segment dominated the global market in 2023. Individuals can benefit financially by participating in V2G programs. They can sell excess energy stored in their EV batteries back to the grid during peak demand periods when electricity prices are higher, thereby earning revenue or reducing their electricity bills. In June 2023, Renault's forthcoming electric model, the Renault 5 incorporates a bidirectional on-board charger. With the Renault 5's bi-directional charger, in conjunction with the Mobilize Powerbox bidirectional charging station and the Mobilize V2G service, drivers will have the opportunity to cut costs on charging and lower their total electricity expenses by selling surplus electricity back to the power grid. This fuels the growth of the segment over the forecast period.
The both segment is attributed to grow at the fastest CAGR during the forecast period. Commercial entities, such as businesses, fleets, and municipal governments, are attracted to V2G technology as it offers an additional revenue stream through participation in grid services programs. On the other hand, individual users are motivated by the potential cost savings offered by V2G technology. This fuels the demand for V2G systems, offering services to both applications.
To know how our report can help streamline your business, Speak to Analyst
Advancements in Technology to Boost the DC Segment Growth
Based on charger, the market is categorized into DC, AC, and both.
The DC segment held the largest market share in 2023. Ongoing advancements in DC charging technology, including improvements in efficiency, reliability, and interoperability, are driving the adoption of DC chargers in the V2G market. These advancements make DC chargers more attractive for both individual consumers and commercial operators. For instance, in October 2023, Fermata Energy's FE-20 bidirectional charger, certified to UL 9741 and UL 1741-SA, was powered by Heliox. It is a 20 kW charger with AI-based software optimizing EV battery usage. Tailored for commercial use, it offers increased power and cost-effectiveness compared to the FE-15. EV owners can use it to sell stored energy back to the grid or offset peak demand costs.
The AC segment is estimated to grow at the fastest CAGR during the forecast period. AC charging standards, such as SAE J1772 and IEC 62196, are well-established and widely adopted, promoting interoperability among different EV models and charging infrastructure. This standardization facilitates the deployment of AC chargers in the V2G market, ensuring compatibility and ease of use for EV owners, and fuels the segment growth over the forecast period.
Government Support and Initiatives Fuel the Market Growth in the Asia Pacific Region
By region, the market is analyzed across North America, Europe, Asia Pacific, and the rest of the world.
Asia Pacific Vehicle-to-Grid Market Size, 2023 (USD Million)
To get more information on the regional analysis of this market, Request a Free sample
The Asia Pacific region held the largest vehicle-to-grid (V2G) market share. Several countries in the region are implementing initiatives to adopt vehicle-to-grid technology to support the rising adoption of electric vehicles, which increases the demand for electricity over time. In November 2023, India's Central Electricity Authority (CEA) proposed initiatives aimed at standardizing and enhancing battery interoperability to streamline the integration of electric vehicles (EVs) with the grid via reverse charging. This vehicle-to-grid (V2G) concept entails EVs feeding electricity back into the public power grid to address energy requirements. In its report on V2G reverse charging, the CEA advocates for the incorporation of provisions for reactive power compensation within the CEA's Technical Standards for Connectivity to the Grid Regulations. Such initiatives fuel the market growth in the Asia Pacific region.
The North American region held a decent share of the market in 2023. The increasing popularity of electric vehicles (EVs) in North America is driving the growth of the V2G market. As more consumers switch to EVs for environmental and economic reasons, there is a growing need for V2G infrastructure to support the charging and discharging of EV batteries.
Europe held the second significant market share in 2023. Europe's efforts to modernize its electrical grid and transition to renewable energy sources generate opportunities for V2G technology. V2G systems enable the integration of EV batteries as distributed energy resources, enhancing grid stability, flexibility, and resilience while supporting the integration of variable renewable energy resources, including solar power and wind.
The market in the rest of the world is anticipated to expand at the fastest CAGR owing to the increasing demand for EVs in the region. This may result in an increased demand for electricity. This makes maintaining grid stability crucial for the countries in the region, which pushes the adoption of vehicle-to-grid technology in the region, boosting the market demand.
Companies are Collaborating and Forming Partnerships to Achieve Competitive Advantage
The vehicle-to-grid (V2G) market has attracted the market players from the automotive industry and the energy industry. Major automakers are involving themselves in the V2G market by developing vehicles integrating bi-directional charging capabilities. Companies specializing in EV charging, such as ChargePoint, EVBox, and ABB, are expanding their offerings to include V2G-compatible charging stations. These providers focus on developing interoperable hardware and software solutions to support bidirectional power flow between EVs and the grid.
The key players in the market include Nuvve Holding Corp, Nissan, and Enel Spa, among others. Nuvve Holding Corp is a leading provider of vehicle-to-grid (V2G) technology and solutions. Nuvve specializes in V2G technology, which allows EV batteries to store and discharge energy back to the grid when needed. Nuvve has established partnerships and collaborations with utilities, automakers, charging infrastructure providers, and government agencies worldwide.
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.
To gain extensive insights into the market, Request for Customization
ATTRIBUTE | DETAILS |
Study Period | 2019-2032 |
Base Year | 2023 |
Estimated Year | 2024 |
Forecast Period | 2024-2032 |
Historical Period | 2019-2022 |
Growth Rate | CAGR of 30.1% from 2024 to 2032 |
Unit | Value (USD Million) |
Segmentation | By Service
|
By Application
| |
By Charger
| |
By Geography
|
As per a study by Fortune Business Insights, the market size stood at USD 11.39 million in 2023.
The market is likely to grow at a CAGR of 30.1% over the forecast period (2024-2032).
Time shifting segment is expected to lead the market due to cost optimization advantages to customers.
The Asia Pacific market size stood at USD 6.54 million in 2023.
Rising adoption of electric vehicles, in conjunction with technological advancements, drive the growth of the market.
Some of the top players in the market are Nuvve, The Mobility House and Virta.
The Asia Pacific region dominated the market in 2023.
The concerns associated with battery degradation may hamper the market growth in future.
US +1 833 909 2966 ( Toll Free )