Demand response (DR) can serve as an effective tool to better balance the electricity demand and supply in the smart grid. It is defined as "the changes in electricity usage by end-use customers from their normal consumption patterns" in response to pricing and incentive payments. This paper focuses on new opportunities for DR with electric vehicles (EVs). EVs are potential distributed energy resources that support both the grid-to-vehicle and vehicle-to-grid modes. Their participation in the time-based (e.g., time-of-use) and incentive-based (e.g., regulation services) DR programs helps improve the stability and reduce the potential risks to the grid. Smart scheduling of EV charging and discharging activities also supports high penetration of renewables with volatile energy generation. This paper proposes a novel stochastic model from the Independent System Operator's perspective for risk management and participation planning of EVs in the smart grid for DR. The risk factors considered in this paper involve those caused by uncertainties in renewables (wind and solar), load patterns, parking patterns, and transmission lines' reliability. The effectiveness of the model in response to various settings such as the area type (residential, commercial, and industrial), the EV penetration level, and the risk level has been investigated. (C) 2016 Elsevier Ltd. All rights reserved.