UK may let carmakers trade V2G tech for extra petrol car sales

UK ministers are weighing a plan to treat electric vehicle battery technology as a currency for meeting emission targets. Under the proposed rules, carmakers would receive credits for installing vehicle to grid systems in new models. Each credit would allow manufacturers to sell an additional petrol car without facing penalties if they fall short of zero-emission vehicle mandates. The government consultation on this approach closed on Friday.

The mechanism relies on bidirectional charging, often called V2G. This technology enables cars to charge when electricity prices are low and discharge power back to the grid or a home when demand is high. Proponents argue this helps balance the energy network during periods when wind and solar generation drop. It could reduce the need to run expensive gas power plants to fill supply gaps.

Critics point to the financial disparity in the proposed credit system. Ben Nelmes, chief executive of the thinktank New AutoMotive, stated that the plan offers manufacturers roughly £4,000 in credits per car. He noted that the actual hardware costs only a few hundred pounds. Nelmes argued that carmakers should only be rewarded if the technology is actively used by drivers, not merely installed. He warned that many drivers do not own the specific chargers required to utilize the system effectively.

Vicky Edmonds, chief executive of the Electric Vehicle Association England, expressed concern about the timing of the incentives. She stated that while millions of electric vehicles are on UK roads, only a small fraction utilize storage or grid connection features. Edmonds said it is too early to reward manufacturers for technology that has not been proven at scale in real-world driving conditions. She emphasized that consumers are still focused on vehicle purchase costs and charging expenses.

The move coincides with preparations to lower electric vehicle sales targets under the current mandate. Environmental groups estimate that these changes could result in 147 million tonnes of additional carbon emissions by 2050. The government aims to spread the adoption of this technology, which is not yet widespread. Smart charging tariffs already encourage drivers to charge during cheap periods, but V2G adds the ability to sell power back.

Several companies, including Octopus Energy in the UK, Renault in France, and BMW in Germany, already facilitate this energy trading. Octopus Energy claims drivers could save £620 annually through its service. The National Energy System Operator forecasts that V2G capacity could reach 1.2 gigawatts by 2030, equivalent to a single power station. By 2050, the organization projects this figure could grow to 41 gigawatts, potentially meeting more than a quarter of peak energy demand.

The decision on the ZEV mandate review will determine whether these credits become standard. The outcome will affect how quickly carmakers transition away from internal combustion engines. It will also define the financial relationship between vehicle owners and the national grid. The final rules are expected to impact the cost of new cars and the structure of future energy markets.