Abstract: The battery of electric vehicles (EV) can be utilized in large scale properly to provide auxiliary services such as peak load regulation and so on for power grid, however frequent charging and discharging of the battery will shorten the lifetime of the power battery for vehicles. On the basis of analyzing the factors influencing the lifetime of EV batteries, the quantitative analysis on the cost of the EV battery participating power grid peak regulation was performed. According to the analysis results, a reward and punishment mechanism of electricity price, in which the lifetime of EV battery was taken into account, was designed to manage the charging of large scale EV. Utilizing signals from the reward and punishment of electricity price, the charging/discharging power of EV battery was guided to be independently adjusted, thus the purpose of peak regulation for power grid was implemented. The proposed scheme is verified by simulation results. The proposed scheme can effectively suppress the load fluctuation in power grid and plays a role of peak-load shifting meanwhile the interests of EV owners can be safeguarded at the same time.