UK considers incentives for electric cars to sell power back to grid

Ministers mull credits for 'vehicle-to-grid' technology, but campaigners warn it could allow more petrol car sales

By LineZotpaper AI staff

Published26 October 2026

Read Time3 min

The UK government is considering giving carmakers incentives to add 'vehicle-to-grid' technology to electric vehicles, allowing them to charge cheaply overnight and sell power back at peak times. However, campaign groups have warned the credits could have the perverse effect of permitting more sales of polluting petrol cars in the near term.

Ministers are exploring ways to encourage manufacturers to install bidirectional charging, also known as vehicle-to-grid (V2G) technology, as part of a review of the zero-emission vehicle (ZEV) mandate. According to plans detailed in a government consultation that closed last week, carmakers could earn a 'credit' for selling cars equipped with V2G capability. That credit would offset the sale of a petrol car, allowing manufacturers to avoid fines if they miss ZEV targets.

The technology enables electric vehicles to act as 'power plants on wheels,' potentially helping balance the grid when renewable generation is low. Home batteries can serve a similar function, while smart charging tariffs already encourage EV owners to charge when electricity is abundant and cheap.

Ben Nelmes, chief executive of the thinktank New AutoMotive, said the technology could help balance the grid and cut bills, but added: 'Carmakers should only be rewarded if it's actually used, not just for fitting it.' He noted that under the proposals, manufacturers could receive credits worth around £4,000 per car for equipment costing a few hundred pounds, while few drivers own the expensive charger needed to use V2G.

Vicky Edmonds, chief executive of the Electric Vehicle Association England, said it was 'far too early' to give manufacturers a credit that effectively allows them to sell fewer EVs, for a technology that has not been tried and tested at scale by drivers in the real world. She said consumers are still focused on immediate concerns such as the cost of the car and charging.

Some drivers already sell electricity back to the grid through companies such as Octopus Energy in the UK, Renault in France, and BMW in Germany. Octopus Energy has claimed users could save £620 a year.

The National Energy System Operator (Neso) forecasts that V2G electricity could add the equivalent of a power station by 2030, providing up to 1.2 gigawatts of on-demand power, and could grow to 41 GW by 2050, enough to meet more than a quarter of peak energy demand.

The government is also preparing to cut EV sales targets under the ZEV mandate. Environmental groups have warned that changes could lead to an additional 147 million tonnes of carbon emissions by 2050.

A government consultation on the proposals closed on Friday.

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Analysis

Why This Matters

V2G technology could help stabilise the UK's electricity grid as renewable energy expands, reducing reliance on fossil-fuel backup plants.
The financial incentives for carmakers might weaken the ZEV mandate's core goal of accelerating EV adoption, potentially increasing long-term carbon emissions.
If implemented, the policy could affect household energy bills by enabling EV owners to profit from selling power back, but concerns remain about charger costs and real-world usage.

Background

The UK's zero-emission vehicle (ZEV) mandate requires carmakers to sell an increasing proportion of electric cars each year, with penalties for non-compliance. The government is currently reviewing the targets amid pressure from manufacturers. Vehicle-to-grid technology is still niche, but proponents argue it could be a key tool for grid balancing, as it allows EVs to discharge stored electricity during high demand. The National Energy System Operator has modelled significant potential capacity from V2G by 2030 and 2050.

Key Perspectives

Ben Nelmes (New AutoMotive): Said V2G is exciting technology that could help balance the grid and cut bills, but argued carmakers should only be rewarded if the technology is actually used, not just fitted. He warned that under the proposals, manufacturers could receive large credits for relatively cheap equipment while few drivers have the necessary charger. Vicky Edmonds (Electric Vehicle Association England): Called it 'far too early' to give manufacturers a credit that allows them to sell fewer EVs for an unproven technology. She noted consumers are still grappling with immediate concerns about EV cost, charging, and daily needs. Environmental groups (implied): Braced for changes to ZEV targets that could result in an additional 147m tonnes of carbon emissions by 2050, according to the article.

What to Watch

The government's final decision on ZEV mandate targets and V2G credits, expected after the consultation period.
Whether carmakers pass on charger costs to consumers or invest in making V2G more accessible.
Uptake of V2G-capable cars and compatible home chargers, which will determine the technology's real-world impact on grid balancing and emissions.

Sources

UK looking to give carmakers incentives to turn EVs into ‘power plants on wheels’ · The Guardian

Checked

10 claims in this story checked against 1 source: 7 supported.

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SupportedThe UK is considering incentives for carmakers to add vehicle-to-grid technology to electric cars.Business | The Guardian: “Ministers are considering giving manufacturers incentives to add “vehicle to grid” (V2G) technology to cars as part of its review of the zero-emission vehicle (ZEV) mandate.”
SupportedThe technology would let electric cars charge when electricity is cheap and sell power back to the grid when demand is high.Business | The Guardian: “The technology allows drivers to charge automatically when electricity is cheap overnight, and then sell some of it back to the grid at times of high demand.”
SupportedCampaign groups say the incentives could allow carmakers to sell more polluting petrol cars in the near term.Business | The Guardian: “However, campaign groups said the ZEV incentives could also have the perverse effect of allowing carmakers to sell more polluting petrol models in the next few years.”
SupportedBen Nelmes said carmakers should be rewarded only if the technology is used, not merely fitted.Business | 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.”
SupportedVicky Edmonds said it was “far too early” to give manufacturers a credit for the technology.Business | The Guardian: “It is far too early to be giving manufacturers a credit that effectively allows them to sell fewer EVs, for a technology that has not even been tried and tested, at scale, by drivers in the real world.”
Partly supportedThe proposals could give manufacturers credits worth around £4,000 per car for equipment costing a few hundred pounds.Business | The Guardian: “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”
Partly supportedEnvironmental groups warned that mandate changes could add 147 million tonnes of carbon emissions by 2050.Business | The Guardian: “Environmental groups are braced for changes that could mean an additional 147m tonnes of carbon emitted into the atmosphere by 2050.”
SupportedNeso forecasts that V2G could provide up to 1.2 gigawatts of on-demand power by 2030.Business | The Guardian: “electricity supplied by V2G cars could add up to the equivalent of a power station by 2030, able to provide 1.2 gigawatts of power on demand, according to the National Energy System Operator”
Partly supportedNeso forecasts that V2G could grow to 41 GW by 2050.Business | The Guardian: “That could grow to as much as 41 GW by 2050, Neso forecasts, enough to meet more than a quarter of peak energy demand.”
SupportedThe government consultation on the proposals closed on Friday, described in the story as last week.Business | The Guardian: “Carmakers could earn a “credit” for selling cars installed with V2G technology, also known as bidirectional charging, according to plans detailed in a government consultation that closed on Friday.”