Accelerating the Large-Scale Application of Vehicle-to-Grid Technology in China

Accelerating the Large-Scale Application of Vehicle-to-Grid Technology

On April 23, 2025, the National Development and Reform Commission, along with three other departments, announced the first batch of pilot projects for the large-scale application of Vehicle-to-Grid (V2G) technology. This initiative includes nine cities: Shanghai, Changzhou, Hefei, Huaibei, Guangzhou, Shenzhen, Haikou, Chongqing, and Kunming, along with 30 projects, such as the V2G collaborative regulation pilot project in Beijing based on new energy storage.

In the context of a global push for an energy revolution, V2G technology has emerged as a key solution connecting the transportation and energy sectors. It plays a crucial role in China’s efforts to build a new power system and achieve its dual carbon goals. The establishment of large-scale V2G application pilots in various cities signifies a new phase of expansion in this field.

Peak-Shaving and Valley-Filling Functions

By the end of 2024, the number of new energy vehicles (NEVs) in China reached 31.4 million, with a total of 12.818 million charging facilities, reflecting a year-on-year increase of 49%. The annual charging volume surpassed 110 billion kilowatt-hours, with a growth rate of 38%. These figures illustrate the trend of growth in NEVs and charging infrastructure.

Overall, the development of charging networks has largely kept pace with the expansion of NEVs. However, on a more granular level, issues such as resource mismatches and oversupply remain concerning. For instance, in Shenzhen, a city with 1.08 million electric vehicles and 360,000 public charging stations, the average utilization rate of these charging stations is less than 8%. This contradiction between the difficulty of charging and the underutilization of charging stations highlights the urgent need for efficient configuration and utilization of charging infrastructure.

To address these challenges, V2G technology has been introduced, enabling bidirectional energy flow between vehicles and the grid. During peak electricity demand, energy stored in vehicle batteries can be fed back into the grid, providing power support. Through orderly charging and discharging techniques, V2G effectively guides the temporal and spatial differences in charging and discharging demand, thereby enhancing the utilization efficiency of charging facilities.

Currently, the concentrated charging of NEVs coincides with residential peak electricity usage, causing a continuous expansion of the peak-to-valley difference in the grid. V2G technology, through intelligent regulation, can shift a portion of charging to off-peak times, effectively smoothing the electricity load curve.

According to Hu Zechun, Deputy Director of the Power System Research Institute at Tsinghua University, the development of large-scale V2G technology within urban power grids can help reduce the peak-to-valley difference and serve as an important resource for ensuring the safe and stable operation of the power system.

Lin Shi, Secretary-General of the Intelligent Connected Vehicle Branch of the China-Europe Economic and Technological Cooperation Association, stated, “If electric vehicles are utilized as mobile energy storage systems, charging during off-peak hours and discharging during peak hours can help flatten the peak-to-valley differences in electricity demand, which is particularly beneficial for a new power system with increasing shares of wind and solar energy.” Liu Kai, Deputy Director of the Technology Department of the China Association of Automobile Manufacturers and Director of the China Charging Alliance, emphasized that V2G not only addresses the charging issues of electric vehicles but also allows users to earn revenue through electricity market transactions, further promoting the adoption of NEVs.

Exploring Diverse Practical Paths

The development of V2G technology relies on collaboration among energy companies, automotive manufacturers, and charging infrastructure providers. Major state-owned energy companies like the State Grid and China Southern Power Grid have been at the forefront of exploring the practical applications of V2G technology. Automotive companies such as Guangzhou Automobile Group and NIO have begun producing NEVs with V2G capabilities since around 2020 and actively participate in V2G demonstration projects. Charging infrastructure companies like TELD have promoted bidirectional charging and discharging equipment and flexible microgrid systems, providing robust support for the large-scale application of V2G technology.

In Guangzhou, a leading model for the “Automobile + Electricity” dual-chain collaborative V2G city, the synergy between the Southern Power Grid and GAC Group aims to achieve commercial-scale applications across four key scenarios: community private V2G, park unit V2G, bus V2G, and public charging and swapping stations. In Shanghai, a demonstration project combining battery swapping stations and the grid is being developed with collaboration from Shanghai Automotive Industry Corporation and Contemporary Amperex Technology Co., Ltd. This project aims for rapid battery swapping and quick response to grid frequency regulation through standardized battery pack designs.

As of May last year, the Southern Power Grid has facilitated the consumption of 8 million kilowatt-hours of new energy through V2G technology, generating over 5 million yuan in revenue for participants such as virtual power plant operators and electric vehicle owners. It is anticipated that by the end of this year, the annual valley-filling response volume for V2G in the Southern Power Grid’s service area, covering Guangdong, Guangxi, Yunnan, Guizhou, and Hainan, will exceed 10 million kilowatt-hours, with discharge volumes surpassing 3 million kilowatt-hours.

Technological Innovation as the Foundation

Current innovations in this field focus on two main routes. On one hand, virtual power plant technology aggregates distributed energy resources, such as NEVs, to provide flexible adjustments and support for the grid, ensuring stable operation. On the other hand, the battery swapping model, through standardized battery pack designs and charging station constructions, enables quick battery swapping and rapid responses to grid frequency regulation needs.

A representative from NIO stated that each of their battery swapping stations functions as an integrated charging and swapping facility, which can flexibly allocate power based on site electricity prices and conduct off-peak charging, saving operational costs while aiding the grid in peak shaving. In 2024, NIO’s swapping stations transferred nearly 310 million kilowatt-hours during peak periods.

The business models emerging from V2G technology also exhibit diversity, with three mainstream models identified. The first is the peak-valley price difference revenue model, which leverages the price difference to reduce user charging costs. The second is the subsidy revenue model, where governments and enterprises provide rewards to users and operators involved in V2G, stimulating market participation. The third is the grid regulation service revenue model, which generates income through services provided by V2G platforms, thus creating new avenues for the commercialization of V2G technology.

According to Zhang Xiang, a visiting professor at Huanghe Science and Technology College, as V2G technology continues to develop and its application scale expands, it will have a profound impact on the automotive industry’s value chain. V2G technology will also promote the deep integration of energy, transportation, and information sectors, providing new momentum for the energy revolution and the transformation and upgrading of the automotive industry.

Addressing the “Last Mile”

Although pilot projects in several regions have shown initial success, achieving large-scale applications still requires overcoming the “last mile” obstacles related to technology, standards, market mechanisms, and infrastructure.

The core of V2G lies in the bidirectional energy flow between electric vehicles and the grid, but the current maturity of technology remains a primary challenge to its promotion. High-frequency charging and discharging impose stricter requirements on the cycle life and safety of power batteries. Additionally, the intelligence level of charging facilities is inadequate; private charging stations often lack the smart control features necessary to meet dynamic grid load adjustment demands. Moreover, the lack of standardized communication protocols and data interfaces among different manufacturers has hindered the efficiency of vehicle, charging station, and grid collaboration.

In a battery swapping station in Guangzhou, a citizen named Ms. Yang shared her experience with her 670 km range electric vehicle that supports grid discharging. She usually charges at a rate of 0.3 yuan per kilowatt-hour, costing 18 yuan for a 60 kilowatt-hour charge. She has participated in discharge activities, earning 140 yuan by discharging 40 kilowatt-hours at a subsidy rate of 3.5 yuan per kilowatt-hour, although she mentioned she would not continue participating due to the lengthy process unless it could be expedited and made more convenient. Another electric vehicle owner, Mr. Chen, expressed that the discharge earnings are not worthwhile and that the increased charge-discharge cycles could impact maintenance costs and battery health.

Furthermore, V2G spans multiple industries, including automotive manufacturing, power, and telecommunications. However, there are currently gaps in the standard system. For instance, V2G functionalities have not yet been included in mandatory standards for NEVs and charging facilities, and the rules for power grid integration and metering have not fully accounted for bidirectional charging and discharging needs. The asynchronous progress in standard-setting across industries has resulted in poor technical compatibility and limited application scenarios.

Gong Chengming, Vice President of TELD, emphasized that advancing V2G should focus on resolving the independent metering issues in power supply scenarios, improving policies, standards, and market structures. This approach will facilitate the large-scale, standardized, and commercial application of V2G, enhance communication channels between new entities and the grid, ensure the safe and efficient integration of distributed resources, and foster a positive environment for V2G participation among vehicle owners.

The launch of the first batch of large-scale V2G application pilots marks a new stage in the integration of NEVs and the power grid in China. Moving forward, a combined approach of policy guidance, technological innovation, and model exploration is expected to foster an industrial ecosystem where vehicles, charging stations, and the grid develop collaboratively. Industry insiders anticipate that by 2030, a comprehensive set of V2G technology standards will be established, and market mechanisms will be refined, positioning NEVs as crucial bidirectional adjustment resources within the power system.