United Kingdom government ministers are considering new incentives for British carmakers that install vehicle-to-grid technology in electric vehicles, according to The Guardian.
Under the Labour government plans, manufacturers would receive credits for selling electric vehicles (EVs) equipped with vehicle-to-grid (V2G) systems. Those credits would count towards complying with the Zero Emission Vehicle (ZEV) mandate, the UK's legally binding sales targets designed to accelerate the transition to electric cars.
Ministers want British carmakers to include the technology in new models to help balance energy supplies when renewable generation is low and ease pressure on the National Grid. Motorists who use the system can earn an estimated £725 a year.
Only around 27 new EV models currently on sale offer V2G capability. While the government plans could expand availability, critics have questioned whether the technology can be scaled up quickly enough, and green campaigners warn manufacturers could use the incentives to continue selling petrol cars for longer.
How two-way electric vehicle charging works
Vehicle-to-grid technology turns an electric car into a rolling power bank by allowing energy from its battery to flow back into the mains electricity network. Through bi-directional charging, a plugged-in vehicle can draw power from the grid and later discharge stored electricity back when national demand surges.
Whereas standard home chargers move power in one direction only, two-way systems allow drivers to automatically charge their cars off-peak when electricity is cheapest and often generated from renewable sources. Owners can then sell unused energy back to the National Grid during peak periods when demand and prices are highest.
Automated signals triggered by periods of high energy consumption or low power generation initiate the transfer of energy from the vehicle.
Alex Schoch, director of electrification at British energy supplier Octopus Energy, said: "Your electric car could do more than get you from A to B. With V2G technology, it can help power your home, sell electricity back to the grid when it’s needed most, and earn you money while it’s parked."
"It turns your car from a cost into an asset, helping drivers save hundreds on bills while making the most of Britain’s clean energy," Schoch added.
Driver earnings from Octopus Energy and OVO trials
Alongside improving grid stability for the wider public, V2G technology lets individual drivers monetise the energy stored in their car batteries. Selling power back to the grid during peak-demand periods can earn motorists between 5p and 30p per kilowatt-hour (kWh).
A recent trial by Octopus Energy using its Power Pack tariff, the UK's first V2G tariff, found users could save up to £620 a year compared with its standard Flexible Octopus tariff, and £161 compared with its Intelligent Octopus Go smart charging tariff.
Similarly, a 2021 government-backed study by energy supplier OVO Energy, software platform Kaluza and carmaker Nissan found some trial participants earned up to £725 a year simply by leaving their vehicles plugged in at home when not in use.
However, these earnings and bill reductions are not guaranteed and could change considerably as V2G technology becomes more widely adopted.
National Grid capacity and UK climate targets
The UK is targeting a clean electricity grid by 2030 and net-zero greenhouse gas emissions by 2050, backed by the Great British Energy Act and the Seventh Carbon Budget published in June 2026.
Connecting millions of EV batteries creates a vast battery network that supports variable renewable sources such as wind and solar power. Discharging car batteries when wind and solar generation falls reduces reliance on costly fossil fuel-powered backup power stations when weather conditions are unfavourable, potentially saving Britain billions.
A 2026 study found EV batteries could almost double the amount of energy storage capacity available to the grid. The earlier 2021 study estimated V2G could save up to £3.5 billion a year through reductions in grid infrastructure, storage and generation costs.
Energy regulator Ofgem, the Office of Gas and Electricity Markets, estimates that if 50 per cent of the estimated 11 million EVs expected on UK roads by 2030 were V2G-enabled, they could provide around 16 gigawatts (GW) of flexible daily capacity to the grid.
Hurdles facing vehicle-to-grid adoption and ZEV mandate warnings
Significant practical barriers remain for drivers and the energy network. Alongside limited vehicle compatibility across current showroom models, households face the high upfront cost of specialist two-way home chargers, installation delays and complex certification requirements.
Environmental groups have also warned that awarding ZEV mandate credits for V2G hardware could have unintended consequences. Under the mandate, carmakers must meet annual zero-emission sales quotas or face penalties, and extra V2G credits could act as a loophole allowing manufacturers to continue selling higher-emission petrol vehicles.
Ben Nelmes, chief executive of green transition think tank New AutoMotive, told The Guardian: "Vehicle-to-grid is exciting technology that could help balance the grid and cut bills, but carmakers should only be rewarded if it’s actually used, not just for fitting it."
He added: "Under these proposals, one or even two extra credits worth around £4,000 each would hand manufacturers thousands per car for kit that costs a few hundred pounds, even though few drivers own the expensive charger needed to use it."
"Ministers should make sure the people who benefit from V2G are drivers and billpayers, not carmakers’ shareholders," Nelmes said.
Financial publication This is Money said it has contacted the Department for Transport, the ministerial department responsible for UK transport and vehicle emissions policy, for comment.
