Vehicle-to-Grid Ready for Prime Time
As the growth rate for the electric vehicle market rises, vehicle-to-grid technology is enhancing storage capacity and power reliability.
The end of the gas-guzzling internal combustion engine is in sight: Experts predict that economies of scale will bring down the cost of batteries to allow electric vehicles (EVs) to reach price parity with gas-powered vehicles by 2024.
As buses, trucks, fleets, passenger cars, and commercial vehicles electrify, it has become apparent that vehicle-to-grid technology, or the ability to store power in EVs and feed it back to the local utility’s electrical grid when demand is high, will become an essential tool for optimized demand-side energy management.
COGNITION Smart Data shows that consumer sentiment about EVs is exceedingly positive, with many people expressing high levels of satisfaction with their EVs or a strong desire to purchase an EV.
Advances in smart charging software along with two-way, or bidirectional, chargers allow EVs to draw power from or feed power back to the grid, depending on demand. As utilities develop more wind and solar power capability, these vehicle-to-grid systems can store excess renewable energy when energy demand is low, releasing it back to the grid at peak demand times.
The systems can also intelligently manage when EVs charge, ensuring that growing numbers of electric vehicles don’t overwhelm grid infrastructure.
COGNITION Smart Data reflects robust consumer desire to switch from gas powered vehicles to EVs, with concerns around affordability and charging times.
Furthermore, vehicle-to-grid technology allows EVs to serve as a backup power source for homes and buildings during emergencies and blackouts.
Consumer Outlook: Growing Demand
According to COGNITION Smart Data, Green Builder Media’s market intelligence service, the number of EVs on the road is expected to explode to 550 million globally by 2040—up from 13 million vehicles today.
COGNITION tracking of online conversation indicates that consumer sentiment about EVs has shifted in the past few years from negative and fearful to positive and optimistic, with consumers now expressing high levels of satisfaction with or interest in purchasing EVs.
Vehicle Segment Transformation
Adoption of EVs is expected to continue its surge as charging infrastructure expands at an exponential rate, charging time decreases (fast chargers can now fully charge an EV battery in about 20 minutes), and vehicle range increases (EVs now have a range of up to 500 miles.)
With battery prices plummeting nearly 90 percent in the past decade, EVs are about to reach price parity with gas-powered vehicles—expected to occur in 2024 when battery costs fall to $100/kWh.
The ever-improving cost-benefit value proposition, in conjunction with a growing selection of mid-sized, large sedan, and crossover options, have some automotive experts forecasting that EV sales will grow at breakneck speed, eclipsing gas vehicle sales as soon as 2030.
The surging public demand for climate action is further spurring adoption for electric vehicles, putting pressure on policymakers and elected officials to craft regulations that eliminate toxic tailpipe pollution and greenhouse gas emissions.
The Biden Administration’s proposed infrastructure plan allocates $170 billion to facilitate the transition to EVs, with nearly $20 billion allocated to building out a coast-to-coast charging system with 500,000 individual chargers at 28,000 charging stations. And a proposed Senate bill would, if approved, provide an additional financial incentive for EV owners, increasing tax credits for EVs from $7,500 to $12,500 (for domestically produced vehicles).
The automotive stalwarts are paying attention to the writing on the wall. GM has pledged to produce only electric vehicles by 2035 and is planning to open its first U.S.-based battery plant in Lordstown, Ohio, by the end of this year, with at least three more on the docket.
Ford is launching electric versions of its iconic brands like Mustang and the F-150 truck. Volkswagen is investing over $35 billion in EVs by 2023 and has plans to offer 70 new fully electric models by 2028.
No doubt, we’ve hit the tipping point for EVs, and the transition to all-electric transportation, as well as innovative technologies like vehicle-to-grid systems, will help us develop a decentralized system where individuals can rely on self-generated electricity to power their homes and vehicles, while also selling surplus power back to the grid—a system that provides true energy independence, autonomy, and flexibility.
For more information about important market trends and innovations that are transforming markets, check out COGNITION Smart Data.