Rethinking the Role of Vehicles in the Energy Transition/ A Strategic Research Project on V2H/V2G
Introduction: Shifting Perceptions of the Automobile
Since the 2010s, the global movement toward energy transition has gained momentum, increasingly influencing the automotive industry. At the time, hybrid and electric vehicles were still a niche, but by the early 2020s, they had become an ordinary sight in urban landscapes around the world.
Among these trends, vehicles equipped with large-capacity batteries—particularly plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (EVs)—began offering value beyond their traditional performance capabilities of driving, turning, and stopping. New use cases emerged: for example, powering smartphones during camping trips or serving as backup power sources during emergencies. These scenarios highlighted that cars could be useful not just when in motion, but also while stationary. This shift began redefining the value proposition of vehicles—from "driving" to also "using."
As the industry explored these ideas, serious efforts emerged around how to generate value from parked vehicles, especially under the umbrella of CASE mobility (Connected, Autonomous, Shared, Electric). Proposals and prototypes started focusing on how vehicles could play a more integral role in people's daily lives, even when not on the road.
Emergence of V2H and V2G
Amid this evolution, technologies such as Vehicle-to-Home (V2H) and Vehicle-to-Grid (V2G) attracted significant attention.
V2H enables bidirectional power flow between a vehicle and a household, effectively turning the vehicle into a massive auxiliary battery. Users can choose to draw electricity either from the grid or from their car, optimizing for cost. For instance, they might charge their vehicle at night when electricity is cheaper, and then power their home with it during the day. Homes with solar panels can also store surplus energy in the vehicle, amplifying savings and sustainability.
V2G extends this concept by allowing vehicle owners to sell stored electricity back to the grid. This is particularly valuable during peak demand or when renewable energy generation and consumption are out of sync.
These innovations are shifting how we view the automobile—not just as a mode of transport, but as a distributed energy asset.
Project Goal: Navigating the Crossroads of Mobility and Energy
Amid this broader industry transformation, an automotive company was beginning to explore next-generation vehicle development. One of the critical challenges was to define the product’s value proposition and identify future functionality.
While there was a conceptual understanding that V2H and V2G were emerging megatrends, their concrete potential as business opportunities remained unexplored. The company was in the early phase of investigation—gathering insights on market trends, technical feasibility, scalability, and strategic positioning. These efforts aimed to answer fundamental questions:
Can we create a viable business model around these technologies?
Are there partners we need to collaborate with?
What capabilities do we need to build internally?
This exploration marked the first step toward commercialization. However, because V2H and V2G sit at the intersection of the automotive and energy industries, the investigation required a cross-sector perspective—posing unique challenges and opportunities.
My Role: Leading Cross-Industry Research and Strategy
My role was to identify and evaluate business opportunities by leveraging both technical and commercial insights. Because this involved regulatory complexities and market-specific dynamics in both sectors, I followed a structured approach:
Collect accurate, cross-industry market information
Investigate related technologies and regulatory environments
Propose actionable business opportunities to the client
Research Areas and Activities
Energy Policy Analysis:
I focused on four major regions—North America, Europe, China, and Japan—where electrification is advancing. Using resources from organizations such as IEA and IRENA, I compiled global energy demand forecasts, climate goals, decarbonization targets, and investment trends in energy transitions.Electrification Incentives and Infrastructure:
I researched each region’s government subsidies, incentive schemes, and the status of grid infrastructure—all key enablers of vehicle-to-grid integration.Power Industry Structure and Constraints:
I analyzed the operational structure of the electricity market, which is typically divided into generation, transmission, and retail. Each has contractual obligations, and penalties for non-compliance. With renewables becoming more dominant—and harder to predict—systems to buffer supply and demand are becoming critical.
Highlighting the Role of EVs in Grid Resilience
To address these challenges, countries are experimenting with multiple approaches—ranging from dam-based hydro storage to hydrogen and large-scale battery systems. EVs are increasingly being discussed as mobile, distributed energy storage units that can support grid stability.
My research uncovered several pilot programs initiated by national governments and utilities. These pilots often involved distributing EVs to participants, tracking daily power usage, charging/discharging cycles, and lifestyle patterns.
One UK study estimated that the monthly added value per household per EV ranged from $25 to $50. At the higher end, that translates to $600 per year, or $3,000 over five years. Considering EV purchase subsidies and the ongoing development of charging infrastructure, these numbers indicate meaningful value—both for consumers and for businesses.
Insights and Broader Implications
The investigation revealed that V2H and V2G are no longer hypothetical—they are becoming commercially and technically viable in certain markets. However, their viability is highly context-dependent, influenced by national energy mixes, regulatory readiness, and consumer behavior.
Crucially, the project highlighted that successful commercialization would require coordination across multiple stakeholders:
Energy sector: Investments in grid modernization and storage technologies
Automotive sector: Battery durability, vehicle interoperability, and user experience design
Governments: Standardization, legal frameworks, and policy alignment
For automakers, additional challenges include managing battery degradation from frequent charge/discharge cycles and ensuring UX integration (e.g., through smartphone apps) that enables energy usage control and optimization.
Deliverables and Client Impact
I synthesized the findings into a comprehensive strategy document covering:
Industry and market landscape
Business potential and timing
Technology readiness
Key risks and resolution priorities
System requirements and compatibility with client capabilities
Exploration of adjacent technology domains
The client responded positively. The cross-functional perspective—linking product, engineering, and business strategy—was especially valuable. My report became a foundation for ongoing internal discussions and follow-up evaluations.
Final Reflection
Imagining a future where vehicles contribute not only to mobility but also to energy resilience is deeply motivating. Overcoming the business and technical hurdles of V2H/V2G will require collaboration across industries—but it opens the door to a future where mobility products play a central role in solving societal challenges.
This project proved that we can—and must—look beyond conventional industry boundaries. It has reinforced my belief that the most exciting innovation lies at the intersection of systems. I hope this research marks the beginning of broader exploration into how vehicles can serve as enablers of the sustainable, interconnected future we aspire to build.
© 2025 Masato Nagayoshi
