Traction Battery Market Research Report Information By Type (Lead Acid Based, Nickel Based, Lithium-Ion Based and Others), By Capacity (Less than 100 Ah, 100 Ah-200 Ah, 200 Ah-300 Ah, 300 Ah-400 Ah and 400 Ah & above), By Application (Electric Vehicle (EV), Battery Electric Vehicle (BEV), Plug-in hybrid Electric Vehicle (PHEV), Hybrid Electric Vehicle (HEV), Industrial, Forklift, Mechanical handling equipment, Locomotives and Others) And By Region (North America, Europe, Asia-Pacific, And Rest Of The World) –Market Forecast Till 2032

Global Traction Battery Market Overview

Traction Battery Market Size was valued at USD 56.80 Billion in 2023. The Traction Battery market industry is projected to grow from USD 69.47 Billion in 2024 to USD 284.29 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 22.30% during the forecast period (2024 - 2032). Increased awareness of environmental issues, air pollution, and climate change are the key market drivers enhancing market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Traction Battery Market Trends

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  Rising demand for electric vehicles is driving the market growth

  
  

Market CAGR for traction batteries is being driven by the rising demand for electric vehicles. The propulsion of the traction battery market finds its impetus in the burgeoning awareness among consumers regarding environmental issues coupled with their escalating concerns. As the comprehension of environmental adversities like air pollution, the ominous specter of climate change, and the relentless march of carbon emissions burgeons, consumers are fervently seeking refuge in cleaner, more sustainable modes of transportation. Electric vehicles (EVs), empowered by the pulsating vigor of traction batteries, emerge as the quintessential panacea, exuding a mystique of zero tailpipe emissions, thereby orchestrating a symphony of redemption for the beleaguered atmosphere, assuaging the angst of greenhouse gas emissions and orchestrating a harmonious ballet of augmented air quality. Furthermore, consumers, ensconced in the citadel of heightened environmental cognizance, are weaving a tapestry of choices that reverberate with the sanctity of their values, denuding the environment of the ravages of their carbon footprint.

This awakened environmental consciousness assumes the mantle of a potent catalyst, propelling the demand for EVs and their faithful companions, the traction batteries. In a choreographed duet, manufacturers and governments don their mantle of responsibility, orchestrating a melange of investments in research and development, erecting the pillars of an EV infrastructure that stretches into the horizon, and extending the olive branch of incentives to fan the flames of electric vehicle adoption, thereby orchestrating a crescendo that echoes through the corridors of the traction battery market, igniting a conflagration of growth and innovation.

With increasing concerns about air pollution, climate change, and dependence on fossil fuels, governments worldwide are implementing stringent emissions regulations and promoting electric mobility. Consumers are also becoming more environmentally conscious, driving the adoption of EVs as a cleaner and greener transportation option. Traction batteries are essential components of EVs, providing the energy storage needed for electric propulsion. The demand for EVs continues to grow, driven by factors such as technological advancements, declining battery costs, and expanding charging infrastructure. The traction battery market is experiencing significant expansion. Manufacturers are scaling up production to meet the increasing demand for traction batteries, thereby driving innovation and cost reductions in battery technology.

Investments in research and development (R&D) play a crucial role in driving the traction battery market forward. As stakeholders recognize the potential of electric vehicles (EVs) and renewable energy technologies, significant investments are directed toward advancing battery technology. R&D efforts focus on improving battery performance, energy density, durability, safety, and cost-effectiveness. Breakthroughs in materials science, chemistry, and engineering led to innovations such as solid-state batteries, fast-charging technologies, and longer-lasting battery packs. These advancements not only enhance the capabilities of traction batteries but also contribute to the broader adoption of EVs by addressing key challenges such as range anxiety, charging infrastructure, and battery life. Thus, driving the Traction Battery market revenue.

Furthermore, ongoing R&D initiatives foster collaboration between industry stakeholders, academia, and research institutions, driving innovation and propelling the growth of the traction battery market. For instance, the BYD and FAW announced intentions to establish an electric car battery production facility in northeastern China with an annual capacity of 45 GWh. The collaboration, named FAW FinDreams New Energy Technology, is a joint venture with a registered capital of EUR 140 million. BYD retains a 51% stake in the venture, with the remaining shares owned by FAW Group.

Traction Battery Market Segment Insights

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  Traction Battery Type Insights

  
  

The Traction Battery Market segmentation, based on type, includes Lead Acid Based, Nickel Based, Lithium-Ion Based and Others. In 2023, the Lead Acid Based segment dominated the market, accounting for 35% of market revenue. Lead-acid batteries have a long-standing presence in the automotive industry, offering a proven and reliable energy storage solution at a relatively low cost. They are widely used in applications such as conventional vehicles, forklifts, and golf carts. Additionally, lead-acid batteries are well-established and readily available, making them a preferred choice for industries where cost-effectiveness and reliability are prioritized.

Nickel-based batteries are experiencing the highest compound annual growth rate (CAGR) in the traction battery market due to their increasing adoption in electric vehicles (EVs) and hybrid electric vehicles (HEVs). Nickel-based batteries, particularly nickel-metal hydride (NiMH) and nickel-cadmium (NiCd) batteries offer higher energy density, longer lifespan, and improved performance compared to lead-acid batteries. With the growing demand for cleaner and more efficient transportation solutions, nickel-based batteries are being utilized in a wide range of automotive applications, driving their rapid growth in the traction battery market.

Figure 1: Traction Battery Market, by Type, 2023 & 2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Traction Battery Capacity Insights

The Traction Battery Market segmentation, based on Capacity, includes Less than 100 Ah, 100 Ah-200 Ah, 200 Ah-300 Ah, 300 Ah-400 Ah and 400 Ah & above. In 2023, the Less than 100 Ah category generated the most income due to their widespread use in a variety of applications, including electric vehicles (EVs), hybrid electric vehicles (HEVs), and industrial equipment. These batteries offer a balance between power output, energy density, and cost-effectiveness, making them suitable for a broad range of electric mobility and stationary power applications. Additionally, smaller-capacity batteries are more compact and lightweight, making them easier to integrate into vehicles and equipment while still meeting performance requirements.

The 100 Ah-200 Ah capacity segment is experiencing the highest compound annual growth rate (CAGR) in the traction battery market due to several factors. As electric vehicles (EVs) become more prevalent, there is a growing demand for batteries with higher energy storage capacities to extend driving range and support larger vehicles. Additionally, advancements in battery technology have enabled manufacturers to develop higher-capacity batteries without significantly increasing size or weight, making them increasingly viable for a wider range of EV applications.

Traction Battery Application Insights

The Traction Battery Market segmentation, based on Application, includes Electric Vehicle (EV), Battery Electric Vehicle (BEV), Plug-in hybrid Electric Vehicle (PHEV), Hybrid Electric Vehicle (HEV), Industrial, Forklift, Mechanical handling equipment, Locomotives and Others. In 2023, the Electric Vehicle category generated the most income due to the rapid adoption of electric vehicles worldwide. As governments implement stricter emission regulations and consumers increasingly prioritize sustainability, the demand for EVs continues to surge. Traction batteries are a critical component of EVs, providing the energy storage needed for electric propulsion. With the automotive industry transitioning towards electrification, the demand for traction batteries in electric vehicle applications far surpasses other sectors, driving their dominance in the market.

The Battery Electric Vehicle (BEV) application is experiencing the highest compound annual growth rate (CAGR) in the traction battery market due to several factors. As concerns about environmental sustainability and air pollution escalate, there is a significant shift towards cleaner transportation options. BEVs offer zero-emission mobility, making them increasingly attractive to consumers and governments worldwide. With advancements in battery technology, BEVs are becoming more affordable, offering longer driving ranges and expanding infrastructure support, driving their rapid growth in the traction battery market.

Traction Battery Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. North America secures the largest market share in the traction battery market due to several factors. The region boasts a robust automotive industry, with significant investments in electric vehicles (EVs) and hybrid electric vehicles (HEVs). Additionally, supportive government policies, incentives for EV adoption, and a well-established charging infrastructure contribute to the widespread acceptance of electric mobility. Moreover, North American consumers exhibit a strong preference for EVs, driving the demand for traction batteries and cementing the region's leadership in the market. Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: TRACTION BATTERY MARKET SHARE BY REGION 2023 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Traction Battery market accounts for the second-largest market share due to there is substantial government support for clean energy initiatives and infrastructure development. Europe holds the second-largest market share in the traction battery market due to various factors. The region has stringent emissions regulations, driving the adoption of electric vehicles (EVs) and hybrid electric vehicles (HEVs). Additionally, there is substantial government support for clean energy initiatives and infrastructure development, facilitating the growth of the EV market. Furthermore, European consumers prioritize sustainability and are increasingly opting for EVs, contributing to the region's significant market share in the traction battery market. Further, the German Traction Battery market held the largest market share, and the UK Traction Battery market was the fastest growing market in the European region.

The Asia-Pacific Traction Battery Market is expected to grow at the fastest CAGR from 2024 to 2032. The Asia Pacific region is experiencing the highest compound annual growth rate (CAGR) in the traction battery market due to several factors. Rapid urbanization, increasing disposable incomes, and supportive government policies are driving the adoption of electric vehicles (EVs) in the region. Additionally, the presence of key automotive manufacturers and the growing demand for electric mobility solutions contribute to the expansion of the traction battery market. Moreover, advancements in battery technology and expanding charging infrastructure further propel market growth in Asia Pacific. Moreover, China’s Traction Battery market held the largest market share, and the Indian Traction Battery market was the fastest growing market in the Asia-Pacific region.

Traction Battery Key Market Players & Competitive Insights

Leading players in the traction battery market are focusing on several strategies to maintain their competitive edge. These include investments in research and market developments to improve battery performance and reduce costs, strategic partnerships and collaborations to expand market reach and enhance product offerings, and expansion initiatives to cater to the growing demand for traction batteries in electric vehicles and other applications. Additionally, companies are innovating with new battery chemistries and technologies to address evolving customer needs and market trends.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Traction Battery industry to benefit clients and increase the market sector. In recent years, the Traction Battery industry has offered some of the most significant advantages to Electrical vehicle. Major players in the Traction Battery market, including Panasonic Corporation, LG Chem Ltd, Samsung SDI Co., Ltd., BYD Company Limited, Contemporary Amperex Technology Co. Limited, Tesla, Inc., Johnson Controls International plc, Toshiba Corporation, Hitachi Chemical Co., Ltd., Mitsubishi Electric Corporation and others, are attempting to increase market demand by investing in research and development operations.

Panasonic Corporation is a leading global supplier of traction batteries, renowned for its expertise in battery technology and innovation. With a focus on lithium-ion battery solutions, Panasonic caters to various industries, including automotive, consumer electronics, and energy storage. In the traction battery market, Panasonic is a key supplier to major electric vehicle manufacturers, providing high-performance battery packs with advanced features such as high energy density, fast charging capabilities, and long cycle life. Leveraging its extensive research and development capabilities, Panasonic continues to drive advancements in battery technology, aiming to meet the evolving needs of electric mobility and contribute to the widespread adoption of electric vehicles worldwide.

LG Chem Ltd. is a global leader in the traction battery market, specializing in the development and manufacturing of advanced lithium-ion batteries for various applications, including electric vehicles (EVs), hybrid electric vehicles (HEVs), and energy storage systems. With a strong focus on innovation and sustainability, LG Chem is known for its high-performance battery solutions that offer superior energy density, reliability, and safety. The company collaborates closely with leading automotive manufacturers worldwide to supply traction batteries for EVs and HEVs, contributing to the electrification of transportation and the transition towards cleaner energy sources. Additionally, LG Chem continues to invest in research and development to further enhance battery technology and drive the growth of the traction battery market.

Key companies in the Traction Battery market include

• Panasonic Corporation


• LG Chem Ltd.


• Samsung SDI Co., Ltd.


• BYD Company Limited


• Contemporary Amperex Technology Co. Limited


• Tesla, Inc.


• Johnson Controls International plc


• Toshiba Corporation


• Hitachi Chemical Co., Ltd.


• Mitsubishi Electric Corporation

Traction Battery Industry Developments

August 2022: Scientists at MIT have pioneered an innovative approach to low-cost batteries crafted from readily available and affordable materials. This groundbreaking battery design incorporates aluminum and sulfur as its electrode components, separated by a molten salt electrolyte. The result is an economically viable solution for backup energy storage in renewable energy systems.

October 2022: EnerSys, a prominent provider of stored energy solutions for industrial needs, has awarded exclusive sales and service rights for all EnerSys motive power products, including industrial batteries, in the Middle Tennessee Territory. With local offices in Nashville, this initiative aims to broaden the company's global footprint. Additionally, Industrial Battery & Charger, Inc. (IBCI) plans to mobilize its team of experienced sales associates and certified service technicians to support EnerSys in expanding the distribution and awareness of its motive power products.

Traction Battery Market Segmentation

Traction Battery Type Outlook

• Lead Acid Based


• Nickel Based


• Lithium-Ion Based


• Others

Traction Battery Capacity Outlook

• Less than 100 Ah


• 100 Ah-200 Ah


• 200 Ah-300 Ah


• 300 Ah-400 Ah


• 400 Ah & above

Traction Battery Application Outlook

• Electric Vehicle (EV)


• Battery Electric Vehicle (BEV)


• Plug-in hybrid Electric Vehicle (PHEV)


• Hybrid Electric Vehicle (HEV)


• Industrial


• Forklift


• Mechanical handling equipment


• Locomotives


• Others

Traction Battery Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America