UK weighs incentives for carmakers to turn electric vehicles into 'power plants on wheels'

The UK government is considering backing electric cars that can act as "power plants on wheels" as part of measures under discussion to support British manufacturers.

Ministers are weighing incentives for carmakers to install "vehicle to grid" (V2G) technology in their models. The idea is part of a wider review of the zero-emission vehicle (ZEV) mandate.

V2G lets drivers charge their cars automatically overnight, when electricity is cheap, and then sell some of that power back to the grid when demand is high. Cars can also supply a driver's own home, which is known as V2H. If millions of vehicles could do this, it might help address a major challenge of moving from fossil fuels to renewables: keeping the grid balanced during still, cloudy or dark periods when wind and solar output falls short of demand. It could also reduce the need to start up expensive gas power plants to fill gaps in supply. Home batteries can do a similar job.

Smart charging tariffs, which do not require V2G, already tackle the reverse problem. They encourage electric vehicle owners to charge when electricity is plentiful and cheap, which reduces the need to pay renewable generators to switch off.

Under plans set out in a government consultation that closed on Friday, carmakers could earn a credit for selling cars fitted with V2G, also called bidirectional charging. That credit would let them sell an additional petrol car without risking fines for missing ZEV targets. The government is also preparing to lower electric vehicle sales targets under the mandate, and environmental groups are braced for changes that could mean an extra 147m tonnes of carbon emitted by 2050.

Ben Nelmes, chief executive of the thinktank New AutoMotive, called V2G "exciting technology that could help balance the grid and cut bills", but argued carmakers should be rewarded only if it is actually used. He said one or two extra credits worth around £4,000 each would give manufacturers thousands of pounds per car for equipment costing a few hundred pounds, even though few drivers own the expensive charger required. Ministers, he said, should ensure drivers and billpayers benefit, not carmakers' shareholders.

Some people already sell power back through companies such as Octopus Energy in the UK, Renault in France and BMW in Germany. Octopus Energy has claimed drivers could save £620 a year with its service.

Vicky Edmonds, chief executive of the Electric Vehicle Association England, which represents drivers, said only a fraction of the UK's millions of EV drivers use V2G or storage technologies. She said consumers are still focused on the cost of their car, the cost of charging and whether an EV suits their daily needs. In her view it is "far too early" to give manufacturers a credit that effectively lets them sell fewer EVs for a technology not yet tested at scale by real-world drivers.

The National Energy System Operator, which balances Great Britain's grid, estimates that V2G cars could together equal a power station by 2030, providing 1.2 gigawatts on demand. It forecasts that this could grow to as much as 41 GW by 2050, enough to meet more than a quarter of peak energy demand.