Europe’s electric vehicle transition is increasingly becoming a question not only of transport emissions but of electricity system economics. A new study by Fraunhofer ISI for Transport & Environment (T&E) estimates that weakening EU electric vehicle targets could require the equivalent of 150 additional peaking power plants to compensate for lost flexibility from EV batteries.
The analysis focuses on the growing role of vehicle to grid (V2G) technology, which allows electric vehicles to store electricity when renewable generation is high and return power to the grid during periods of peak demand. As wind and solar penetration increases across Europe, the ability to balance variable generation is becoming a central infrastructure challenge. EV batteries could provide a distributed storage resource, but fewer electric vehicles would reduce the available capacity.
The study examines the potential impact of scaling back EU vehicle CO2 targets, a move advocated by the European Automobile Manufacturers’ Association (ACEA). According to the research, weaker targets could result in 49 million fewer EVs on European roads by 2040, reducing the amount of battery capacity available for grid balancing.
The consequences would extend beyond the automotive sector. Without sufficient EV adoption, the report estimates that Europe would install 37% less new solar photovoltaic capacity between 2025 and 2040, equivalent to 51 GW. The reduction is linked to a weaker business case for renewable expansion because EVs would absorb less excess electricity during periods of high renewable output.
Renewable curtailment could also increase. The study projects that Europe would lose an additional 6 TWh of clean electricity annually by 2040 if EV deployment slows, as wind and solar facilities would increasingly need to reduce output when generation exceeds demand and storage capacity.
The issue highlights a changing relationship between transport electrification and grid planning. Historically, EV adoption has been evaluated primarily through emissions reductions and oil displacement. However, as power systems become more dependent on variable renewable generation, electric vehicles are increasingly viewed as a potential flexibility asset.
“If there are fewer EVs to feed into the grid, Europe would need one-third more back-up capacity, or 13 GW, than if current car CO2 targets are maintained,” the study found. That additional capacity would represent roughly 150 peaker plants, typically used to provide short-duration electricity supply during demand spikes.
Grid costs would also rise. The report estimates that weakening EV targets could require an additional €4 billion annually in grid investment as utilities compensate for the reduced ability of EV batteries to support local electricity demand. More transmission capacity, distribution upgrades, and transformers would be needed to manage higher peak loads.
The financial implications are significant because Europe’s energy transition depends not only on adding renewable generation but also on creating systems capable of integrating it efficiently. If storage flexibility is insufficient, more investment may shift toward conventional backup generation and network expansion rather than renewable deployment.
The study also points to limitations in current EV technology adoption. While V2G potential depends on a large installed base of electric vehicles, many new EV models still lack bidirectional charging capability. Researchers argue that future regulatory frameworks should address interoperability and require new electric vehicles to support bidirectional charging systems.
