China's EV Fleet Could Reach 400 Million by 2040 as Vehicle-to-Grid Storage Expands

Globally, an energy transition centered on replacing fossil fuels with renewable energy and gasoline vehicles with electric vehicles is advancing, and building a new power system that integrates generation, grid, load and storage has become the direction for power system development. As the number of new energy vehicles approaches the hundred-million scale, electric vehicles can serve not only as transport but also as a regulating resource for the power system. Estimates show that China's electric vehicle fleet will reach 110 million to 160 million units by 2030 and further rise to 300 million to 400 million by 2040. With the spread of ultra-fast charging facilities, the load shock from concentrated charging is becoming more prominent: if 5 million electric vehicles charged simultaneously at night at 10 kilowatts, total load would reach 50 million kilowatts, exceeding the carrying limit of a single city's power grid. Moving charging behavior from disorder to order and then achieving vehicle-to-grid (V2G) interaction has become the path to breaking the charging capacity bottleneck.

The essence of vehicle-to-grid interaction is to transform electric vehicles from pure load into mobile energy storage units that combine both load and power-source attributes. Electric vehicles charge during low-demand periods and discharge back to the grid during peak periods, which can cut peak grid load, and owners can earn income by participating in power trading. Based on a single vehicle battery pack of 70 kilowatt-hours, using surplus cycle life to participate in energy storage trading could generate cumulative lifetime income of RMB 15,000 to RMB 75,000. Electric vehicles thus shift from a single consumer product to a product with asset attributes.

Regarding public concerns about battery life and safety, research shows that scientifically conducted vehicle-to-grid interaction will not accelerate battery degradation and can instead help extend calendar life. Current vehicle lithium iron phosphate batteries can complete about 3,000 full charge-discharge cycles before capacity decays to 70%, while a household vehicle consumes only about 500 cycles over a 10- to 15-year service life, leaving substantial surplus. Technologies such as bidirectional pulses can make lithium distribution more uniform, inhibit lithium plating, and improve fast-charging and low-temperature performance. Vehicle-to-grid interaction also keeps batteries in a half-charged state more often, avoiding the calendar-life damage caused by long-term parking at full charge, and can prevent safety accidents when risk factors are precisely identified.

In application and promotion, vehicle-to-grid interaction has formed three typical scenarios: first, the park scenario, coordinating vehicle batteries with photovoltaic and energy storage facilities; second, the transport scenario, using integrated photovoltaic-storage-charging and heavy-truck battery-swap batteries to charge passenger vehicles, reducing the impact on the large power grid; and third, the building scenario, creating an integrated building-vehicle-grid system to achieve comprehensive management of building energy use and vehicle-to-grid interaction.

In energy storage deployment, Chinese cities are dominated by high-rise buildings, and conditions for households to install fixed energy storage are limited, making it more practical to use electric vehicles in underground garages for energy storage. Under the 15th Five-Year Plan for New Power System Construction, by 2030 the scale of aggregated adjustable charging from vehicle-to-grid interaction will reach 50 million kilowatts. Estimates show that by 2040, as the growth of fixed energy storage slows, vehicle-to-grid energy storage capacity may exceed 4 billion kilowatt-hours; by 2050, the onboard batteries of 350 million electric vehicles will have total capacity of 25 billion kilowatt-hours, enough to meet the country's electricity demand for one day in an emergency.

The next five years are the start-up period for the vehicle-to-grid industry. As technical standards improve, market mechanisms are refined and business models mature, hundreds of millions of electric vehicles will converge into mobile charging resources for the power grid, supporting new energy development.