precedence statistic

Vehicle to Grid Technology Market Will Hit Strong Growth through 2027

Oct 20, 2023

The global vehicle-to-grid technology market could grow from USD 1.77 billion in 2021 to USD 17.43 billion by 2027 at a 48% from 2022 to 2027.

Surge in demand for battery electric vehicles

As the automobile gained popularity around the world during the last century, city planning, infrastructure, and distribution systems underwent significant changes. People's lives, social connections, and even job patterns have all changed as a result of the shift from highly crowded metropolitan regions to suburbs. While the impacts of modern automobile use continue to elicit philosophical debate, probably the most contentious issue is the environmental impact of roughly one billion cars globally. Environmental concerns have fueled demand for automobiles that do not use internal combustion engines. The Battery Electric Vehicle, a zero-emission vehicle, is one of the leading technologies.

Since battery electric vehicles use electricity, replacing internal combustion engines automobiles with battery electric vehicles has the obvious benefit of lowering vehicle-emitted pollution. However, the ramifications are far reaching and possibly disruptive, both in terms of infrastructure and, more importantly, the automotive value chain. Because battery electric vehicles have a huge battery, they might be used as distributed power storage devices in cities, minimizing the danger of blackouts and generating intermittent renewable energy. The nature and attributes of battery electric vehicles may transform the car industry's structure and business models - who the players are and where the money is produced. In this way, the expansion of battery electric vehicles could be even more disruptive than the Ford Model T and its storied manufacturing line.

Despite the fact that several automakers are expected to offer battery electric vehicle models, the question of whether battery electric vehicles will be accepted by the general public remains unexplored. According to one industry projection, the battery electric vehicle market will be over 13 million vehicles in 2020, while another research firm predicts only two million vehicles in the same year. Given that total vehicle sales are expected to be over 100 million in 2020, battery electric vehicles will likely have a minor part of the market, while internal combustion engine vehicles will continue to dominate for at least another decade. In China, the market for electric bicycles has grown by more than 200 times in the last decade, from 0.1 million to 22.5 million units. This rapid expansion reflects the market's high demand for motorized vehicles. Consider China's recent influx of ultra-low-cost battery electric vehicles. These ultra-cheap battery electric vehicles, which start at $4,500, have a top speed of 60 km/h and a range of up to 100 kilometers. These battery electric vehicles are mostly composed of fiber-reinforced plastic and lack equipment like air conditioning or an audio system. In the 2030 Sustainable Development Scenario, the vehicle to grid potential and variable renewable capacity are compared to overall capacity generating requirements.

Growing adoption ‘vehicle to grid technology’ in energy sector

With the rising usage of renewable energy sources such as solar and wind gaining traction in many countries, there is a strong case to be made for improving the business model that connects battery electric vehicle infrastructure and energy. Battery electric vehicles could be used as storage devices in smart grids. Smart grids are electric power networks that use information technology to provide efficient, stable, and bidirectional electricity distribution. Smart grid technology enables society to maximize the use of renewable energy sources like photovoltaics and wind turbines. It is being developed in a number of locations, including Colorado, the U.S., and Amsterdam, the Netherlands, in order to meet the governments' renewable energy usage targets.

Vehicle to grid technology, which allows battery electric vehicles to interface with the electrical grid, is being developed by research organizations including the University of Delaware. Battery electric vehicle owners can use this technology to charge their vehicles at a lesser rate during off-peak hours and discharge electricity during peak hours. As a result, consumers can save energy and money for as long as a battery electric vehicle is parked in the garage or in the parking lot. Electric-load levelling has advantages for electric power providers as well. Furthermore, by acting as battery storage devices, battery electric vehicles can boost the use of intermittent renewable energy. As a result of its connection to the electric power grid, the battery electric vehicle can now perform new value-adding functions in addition to transportation.

Vehicle to grid technology, on the other hand, has numerous obstacles. A power grid system that can safely absorb the reverse power flow from battery electric vehicles, for example, is necessary. To manage the voltage for reverse power flow, many older homes would require modified electrical infrastructure. Furthermore, to minimize unexpected power shortages, a precise forecasting system for battery electric vehicle electricity demand is required. To overcome these obstacles, automobile industry participants will need to interact with companies outside the industry that are all working on smart grid technology at the moment. Companies who can create battery electric vehicle services that coexist with existing energy infrastructure will be considerably better positioned to profit in the next decades.

Expansion of automotive industry

Generally, the automobile sector has been organized in a hierarchical manner, with automakers at the top and suppliers serving their needs. This was not a problem as long as the structure conformed to society's perception of the automobile as a stand-alone product. However, because the battery electric vehicle has the potential to become a technological component of the social system, it must complement other products and services that are also linked to the social infrastructure. Furthermore, battery electric vehicle producers will need to work closely with city planners and, of course, electric power utilities. To put it another way, the breadth of competition in which automakers participate will broaden, and the resulting business model will likely shape competition.

Many businesses, not only manufacturers, are eager to establish new business models using battery electric vehicles. The relative ease of manufacturing battery electric vehicles, as well as their numerous applications in modern infrastructure, are particularly appealing. Nonetheless, established automakers and new entrants who develop and build battery electric vehicles must remember that the primary use of battery electric vehicles remains as a mode of transportation, notwithstanding their speculative technological potential. Despite their relative simplicity of manufacture, battery electric vehicles will be subject to the same laws that governed the creation of the modern internal combustion engine vehicle.

Growing strategic initiatives by key industry players

Manufacturers in the worldwide vehicle to grid technology market are enhancing product quality and expanding their operations to strengthen their market position. Nuvve Corporation and EDF Group formed a strategic cooperation in December 2018 to promote the latter's electric mobility goal. The two companies are anticipated to create electric vehicles and vehicle to grid solutions for the European market as a result of their relationship. In June 2019, ENGIE and Fiat Chrysler Automobiles agreed to offer innovative e-mobility solutions in 14 European nations. The company would provide charging stations for Fiat Chrysler Automobiles’ dealers and customers in Europe through its subsidiaries, ENGIE Eps and EVBox. OVO Energy Ltd stated in February 2019 that Mitsubishi Corporation would make a strategic investment in exchange for a 20% share in the company. This money will be used to expand into new markets in Europe and Asia-Pacific, as well as to speed up the development of Kaluza, the company's intelligent energy technology business.

In addition, Marubeni Corporation, in collaboration with Origami Energy, Grid Edge, Smartest Energy, and Virta, announced the deployment of a proof of concept for vehicle to grid and vehicle to building in March 2021. Western Power Distribution and Crowdcharge collaborated in June 2020 to launch the next phase of electric country with a new vehicle to grid trial in the Midlands, South West, and South Wales. EDF, a French utility company, and Nissan, a Japanese automaker, announced a cooperation in August 2021 to provide a new commercial vehicle to grid charging service for electric car fleet owners in the UK. EDF introduced the latest vehicle to grid commercial charging service for fleet holders of e-NV200 and Nissan's Leaf cars over its EDF Group subsidiary Dreev, which is a collaboration with Californian startup Nuvve.

Furthermore, Blue Bird Corporation will connect and charge up to 200 Nuvve vehicle to grid DC 125 kW fast charging stations with two dispensers in November 2021, according to Nuvve Holding Corp., a worldwide cleantech business that leverages its intelligent energy platform to electrify the world. This would result in the establishment of a first-of-its-kind vehicle to grid hub, which would allow electric buses to function as energy storage assets, allowing them to be used more efficiently. ABB's bi-directional charging technology will be employed in a Vehicle to grid partnership project starting in October 2020. As part of partnership with Dreev, a partnership between Électricité de France and Nuvve that focuses in smart charging for electric vehicles, ABB will deliver its brand-new 11 kW two-directional charging technology, which is specifically built for vehicle to grid.

Growing sales of electric vehicles

Electric vehicles are thought to be viable options for lowering greenhouse gas emissions and, more broadly, global anthropogenic emissions, which are primarily generated by the transportation and energy sectors. They also contribute to the diversification of the energy sector and open up new business prospects. Because electric vehicles rely on the electric grid for power, synchronizing these networks with low-carbon electricity production by adopting renewable energy with high energy-conversion efficiency would surely result in a greener energy and mobility landscape. Electric vehicles also have a superior overall efficiency when compared to their gasoline-powered cousins, the internal combustion engine-based automobiles. This is owing to increased grid electricity generating efficiency and regenerative braking.

As per the International Energy Agency, the global number of battery electric cars reached 4.79 million in 2019, with China accounting for more than half of the 2.58 million battery electric vehicles. Furthermore, the number continues to rise at a substantial rate, around 36% per year, implying that the worldwide electric vehicle stock might reach around 245 million by 2030. If each EV's battery capacity is 50 kWh, the total battery capacity of all electric vehicles in 2030 might be 12.5 TWh. Due to favorable government regulations, incentives, and subsidies, lower manufacturing and battery prices, growing social acceptability, and expanded infrastructure to support electric vehicles, such as charging stations, the global share of electric vehicles in the mobility market is fast expanding.

According to the International Energy Agency, the demand for electric vehicle charging in 2030 might reach 1000 TWh in a sustainable development scenario. China (263 TWh), the U.S. (153 TWh), Europe (187 TWh), India (83 TWh), and Japan are likely to drive this demand (21 TWh). In Japan and Europe, this charging demand accounts for around 2% and 6% of overall electricity demand, respectively. In a traditional charging system, electric vehicle charging is done in a one-way fashion, with electricity flowing exclusively from the charger (grid) to the electric vehicle battery and not the other way around. This unidirectional charging could result in uncoordinated charging, resulting in unanticipated, variable, and focused electricity demand at times.

As it has such a big impact on the quality of transmission through electrical grids, managing electric vehicle charging patterns is considered a critical step for electric vehicle penetration in worldwide markets. The International Energy Agency also forecasted a considerable increase in electricity demand in 2030, particularly during the overnight hours, blaming this on unmanaged and concentrated electric vehicle charging. The demand for this product is expected to be around 5.5 percent in the U.S., 6.5% in the European Union, and 9.5% in China. Additionally, when electric vehicles are connected to the electrical grid, it is possible to tap into the huge battery reserves of electric vehicles for use in other secondary applications with proper management and supervision.

As electric vehicle technology is still in its infancy, policies are critical in advancing it to the next stage of market and social acceptance. In countries where electric vehicles are still in their early stages of adoption, incentives, supporting infrastructure, and electricity, both for supply capacity and balancing capabilities, are seen as key issues that must be addressed first. Fiscal incentives, such as subsidy and tax reductions, as well as complimentary treatments, such as free road parking, toll rebates, and priority lanes, are some of the policy incentives that are expected to increase public adoption of electric vehicles.

Future prospects for ‘vehicle to grid technology’

Electric vehicles have numerous benefits. It's also a great mode of transportation because it's emission-free, efficient, and optionally rechargeable. Vehicle to grid technology enables plug-in electric vehicles to communicate with power grids and provide extra energy stored in batteries to the grids. The concept of vehicle to grid has been around since the turn of the twenty-first century, specifically since 1997. Vehicle to grid technology's future is inextricably linked to the adoption of electric automobiles. Electric Vehicle Supply Equipment revenue has surged by up to 80% globally as many companies invest more in research and development. In the foreseeable future, vehicle to grid technology has a promising future. They provide a more solid foundation for connecting grids and electric automobiles.

Power grids benefit greatly from the use of vehicle to grid technology. After that, it can be used in a variety of ways. As a result, using Vehicle to grid technology in conjunction with smart grids is the ideal approach to get the most out of it. Vehicle to grid technology can also be used to provide electricity to private residences. It has the potential to be a more consumer-friendly service. Electric vehicles can be channeled to give power to homes in the same way that they are connected to public or community grids. Using vehicle to grid technology, a solar-powered car can supply power to the grid or to the home when the battery is full. Its use in this field is considerably more important. This is due to the fact that avoiding fluctuations necessitates temporary storage and efficient control of extra electricity. What better way to utilize the stored energy than to provide it to grids that need it. Cars with rechargeable batteries and built-in generators are similarly affected. Power distribution and production are improved because to vehicle to grid technology.

A two-sided energy flow concept depicts the future of vehicle to grid technology - the flow of energy between energy producing and distribution companies and consumers. As the number of electric vehicles on the road grows, vehicle to grid technology is on the approach of being more widely recognized. In 2019, annual sales of electric vehicles increased by 40% and have continued to rise. Vehicle to grid technology will be developed and widely implemented before 2030 to address the issue of peak demand. Batteries are predicted to charge faster as technology advances, resulting in increased grid demand. As a result, there will be a higher need to balance grid systems, and vehicle to grid technology will be able to solve most of the issues. Due to obvious causes such as climate change effects and gas emissions from fossil-fuel-generated power, the globe will require more renewable energy and power sources than previously. This will have an impact on networks and their management. In the coming years, vehicle to grid technology will help us intervene more effectively to avoid negative effects.