Is vehicle-to-grid infrastructure buildout in the United States a pipe dream?

Lack of Regulatory Frameworks

Future passage of federal regulations to mandate the manufacture of V2G-capable vehicles and bidirectional charging points could help shift the transition to this technology into high gear. The Bipartisan Infrastructure Bill (BIL) set aside billions for EV charging infrastructure, including $5 billion for the National Electric Vehicle Infrastructure (NEVI) program to help states develop a cohesive EV charging network along designated Alternative Fuel Corridors (AFC) between 2022 and 2026. States must use the funds to build charging stations along highways and follow strict interoperability and network connectivity requirements. The only issue is that the funding program falls just short of including V2G mandates, dashing hope for supportive policy prescriptions and nationwide standardisation to increase the viability of large-scale V2G technology in the near future.

Technological Needs

For V2G to be viable, both vehicles and charging stations capable of bidirectional charging are needed. Thus, automakers and utilities share a large portion of the burden of creating an environment conducive to the scale-up of bi-directional charging-capable EVs and charging stations. Many have put their pedals to the metal to develop bidirectional-charging capable EVs for the market, but only a handful of models are available commercially today. Companies like Tesla, which accounts for the majority of EV sales in the United States, would be the most effective in taking charge in this arena. The recently released Cybertruck, which uses the company’s latest Powershare technology release, can be used to charge a home, (i.e., V2H, Vehicle-to-Home), but is still not V2G-enabled. Elon Musk has stated intentions to produce vehicles capable of bi-directional charging available by 2025, though no further announcements about progress in this department have been released. The development of bidirectional charging stations is paramount to the scaling of V2G. Yet, the current high cost of this technology likely diminishes the incentive to install V2G-enabled infrastructure.

Challenges with Grid Integration

The grid infrastructure in the U.S. today is not prepared to handle the growing electricity demand deriving from the electrification of vehicles. V2G-enabled EVs could ease the growing burden on the grid. However, this requires close cross-collaboration between multiple supervising authorities and regulatory bodies. In order to enable the creation of a V2G-fueled VPP, improvements in transmission & distribution, planning, and coordination of market operators which result in better integration of EVs in the broader bulk power system must be realized. Standardisation and interoperability guidance must come from FERC, the National Institute of Standards and Technology (NIST) and the U.S. Department of Energy (DOE). Additional support policies and oversight – such as market- or region-specific rules for V2G implementation, or the funding of local pilot programs – should come from RTOs or ISOs, state-level Public Utility Commissions (PUCs), and state-level Departments of Transportation (DOT). In June 2023, the American National Standards Institution (ANSI) published a Roadmap of Standards and Codes for Electric Vehicles at Scale. Among the gaps identified, ANSI offers several recommendations aimed at creating uniform technical standards across multiple agencies to allow for the continued development of V2G technology.

This is also aligned with a report released in 2024 by the North American Electric Reliability Corporation (NERC), an organisation which develops and enforces standards to ensure grid reliability and security in North America. NERC’s report states that there are no robust transmission studies to capture EV impact on the regional grid and more work will be required to cover this gap. Additionally, EV charging needs in the U.S. are currently modelled by a single, generic electrical model which is unable to adequately account for real-world obstacles. RTOs and ISOs need a more sophisticated model to capture EV behavior in order to improve transmission planning adequately.

Utilities must be able to remotely calculate the quantity of ever-changing EV inputs in real time in order for a V2G-driven VPP to be functional. This requires a specialised machine learning application to be created which can perpetually perform this function on a grid-wide basis: take input from grid needs and allow Virtual Power Plants (VPPs) – the individual plugged-in EV, in this case – to respond and fulfill approved power supply requests almost instantaneously.

Encouraging EV Adoption and V2G Program Enrollment

There are several hurdles to EV adoption in the United States. The cost of buying an EV is high; though the average price for an EV has decreased significantly to around $57,000, it is still higher than the average price for a conventional passenger or light-duty vehicle, which is approximately $48,000 in 2024. State or federal incentives help close this gap. Then, there is the perception that EV charging stations are few and far between, especially in comparison to gas stations, and charging EVs takes longer compared to refueling a conventional vehicle. This means that EV owners must carve out time to find an available charger and then wait for their vehicle to reach an acceptable battery level percentage. Range anxiety, or the concern that an EV will run out of power before reaching a charging station, is therefore something that could still prevent consumers in the U.S. from investing in an EV.

Range anxiety is a top concern for EV owners in the U.S. today. Therefore, it stands to reason that they are more focused on maintaining their vehicles' charge rather than seeking short-term financial gains from selling that charge to the grid. Utilities must be able to motivate EV owners to sign up for a V2G program and thus release charge from their batteries to the grid by paying them adequately per kWh of electricity. Influencing customer behaviour becomes even more challenging when V2G has the potential to degrade EV batteries – increased charging and discharging can cause EV batteries to lose their maximum potential more rapidly and accelerate the need to replace them. This is a large expense for an individual customer and can render participation in V2G programs cost prohibitive. Potential solutions include convincing automakers to extend battery warranties, creating batteries which are less susceptible to degradation, or designing attractive V2G programs with an adequate economic reward system. These remedies require additional state and federal oversight which likely will not materialise in the near future.