Home Semiconductor & Electronics Global Traction Battery Market Size, CAGR of 19.8%, Forecast by 2032

Traction Battery Market Size, Share & Trends Analysis Report By Product Type (Lead Acid Based, Nickel Based, Lithium-Ion Based, Others), By Capacity (Less than 100 Ah, 100-200 Ah, 200-300 Ah, 300-400 Ah, 400 Ah and Above), By Application (Electric Vehicle (EV), Battery Electrical Vehicle (BEV), Plug-in hybrid electrical vehicle (PHEV), Hybrid electrical vehicle (HEV), Forklift, Mechanical handling equipment, Industrial, Locomotives, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Report Code: SRSE55900DR
Last Updated : 28,Aug 2024
Author : Straits Research
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Traction Battery Market Size

The global traction battery market size was valued at USD 56.12 billion in 2023. It is projected to reach from USD 67.23 billion in 2024 to USD 285.25 billion by 2032, growing at a CAGR of 19.8% during the forecast period (2024–2032). A traction battery is a rechargeable battery that powers the electric motor of a vehicle, allowing it to move. Traction batteries play an essential role in electric cars (EVs), which include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). These batteries store electrical energy and transfer it to the electric driving system as needed. Factors such as transportation electrification and more investment will drive the adoption of electric vehicles. Traction batteries used to power electric motors in electric or hybrid vehicles have shown tremendous growth as demand for electric cars has increased. This might be one of the primary drivers of the traction battery market growth. 

Furthermore, attributes such as recyclability, cheap cost, and eco-friendliness are contributing to the development of the electric vehicle category, consequently accelerating market growth. However, the development of charging infrastructure for electric vehicles is a severe setback in many nations due to limited space, investments, electrification, and other factors. This aspect will limit the traction battery market share over the forecast period.


Traction Battery Market Growth Factors

Rising Electric Vehicle Production

The rapid use of electric vehicles is a significant aspect driving the traction battery market trend. As the automotive industry shifts to sustainable and zero-emission transportation, the need for traction batteries to power electric vehicles is rapidly increasing. According to the International Energy Agency (IEA), electric vehicle (EV) sales will rise by 35% in 2023. According to the IEA's 2023 Global EV Outlook report, passenger electric vehicles will become increasingly common by 2023, accounting for nearly one in every five new car sales. According to an International Energy Agency report, electric cars (EVs) will account for more than 60% of worldwide vehicle sales by 2030. Tesla's investment in Gigafactories dedicated to battery manufacture demonstrates the company's dedication to increasing manufacturing capacity. For example, the Gigafactory in Nevada (Gigafactory 1) is one of the world's most extensive battery manufacturing facilities, accounting for a significant portion of traction battery output.

Furthermore, governments worldwide enact regulations and incentives to encourage electric vehicle use. Tax breaks, subsidies, and laws favoring electric vehicles are among the initiatives implemented. For example, Norway and the Netherlands have rules to incentivize EV adoption aggressively. For instance, FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) plans. Provides financial incentives to EV makers and buyers. The updated FAME II scheme offers a 50% larger subsidy (?15,000 per kWh) for electric bikes and scooters. Similarly, the federal government has set a goal of making half of all new vehicles produced in the United States zero-emissions by 2030 and building a convenient and equitable network of 500,000 chargers to help make EVs available to all Americans for local and long-distance trips.

As a result, market research forecasts continuously indicate that the electric car market will increase significantly. Electric vehicles will account for significant worldwide sales in the following decades, strengthening the long-term demand for traction batteries.

Traction Battery Market Restraining Factors

Limited Driving Range and Charging Infrastructure

Electric vehicles frequently confront issues related to a limited driving range on a single charge and the availability of a complete charging infrastructure. These factors add to range anxiety and may slow the mainstream adoption of electric vehicles. While battery technology developments have boosted electric vehicles' driving range, some models may still have a shorter range than traditional vehicles with internal combustion engines. This constraint may cause anxiety for consumers, particularly those who travel great distances.

As of 2022, many electric vehicles have a driving range of more than 200 miles on a single charge, with some high-end versions exceeding 300. However, this range may need to be revised for some driving circumstances, raising concerns among prospective electric vehicle purchasers. Range anxiety is the fear that an electric car will run out of battery power before reaching its destination or a charging station. This psychological barrier might undermine consumer confidence in purchasing electric vehicles, particularly among those who are inexperienced.

Furthermore, a need for charging stations is a significant barrier limiting the market adoption of electric cars (EVs). In 2022, the global average was approximately ten EVs per charger. However, countries like China, Korea, and the Netherlands have had fewer than ten EVs per charger for many years. The availability and accessibility of charging stations are essential to adopting electric vehicles. A sufficient charging infrastructure can impede long-distance travel and reduce the convenience of electric vehicle ownership. Therefore, these issues hurt the market's growth.

Traction Battery Market Opportunity

Advancement in Battery Technology

Continuous developments in battery technology create a substantial traction battery market opportunity. These advancements may lead to gains in energy density, charging speed, safety, and overall performance, making electric vehicles more appealing and boosting demand for enhanced traction batteries. Solid-state batteries mark a significant leap in battery technology. Unlike ordinary lithium-ion batteries, solid-state batteries use solid electrolytes rather than liquid electrolytes. This design provides increased energy density, faster charging times, and improved safety.

According to studies, solid-state batteries have the potential to generate much better energy densities than conventional lithium-ion batteries. This could lead to longer driving ranges for electric vehicles and more significant applications for traction batteries beyond the automotive industry. Major corporations, including automakers and technology businesses, aggressively invest in solid-state battery technology. Toyota, BMW, and QuantumScape are pursuing research and development to commercialize solid-state batteries. Advances in battery chemistry and materials present an opportunity to boost energy density. Higher energy density means traction batteries can store more energy, allowing electric vehicles to travel further without increasing their weight or size.

Study Period 2020-2032 CAGR 19.8%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 56.12 billion
Forecast Year 2032 Forecast Year Market Size USD 285.25 billion
Largest Market Asia Pacific Fastest Growing Market Europe
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Traction Battery Market Regional Analysis

The global traction battery market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia Pacific Dominates the Global Market

Asia-Pacific is the most significant global traction battery market shareholder and is estimated to grow at a CAGR of 8.8% over the forecast period. The rising demand for consumer goods has fueled the expansion of industrial manufacturing sectors in nations such as China, India, and others, where traction batteries are utilized to power industrial machinery systems. This could boost the traction of the battery industry in Asia-Pacific. Furthermore, increased environmental concerns and government measures have accelerated the emergence of electric vehicles, which rely heavily on traction batteries to power electric motors.

As a result, market leaders are increasingly focusing on releasing new goods to capitalize on current prospects. For example, in 2021, Birla Carbon, an Indian maker of sustainable products, announced the debut of new vehicle lead-acid and lithium-ion batteries, Conductex I and Condectex e. These product launches are expected to boost the growth of traction batteries in Asia Pacific, excluding Japan.

Europe is anticipated to exhibit a CAGR of 9.0% over the forecast period. In 2023, Europe's traction battery market is predicted to develop further due to rising E.V. sales and aggressive efforts to reduce carbon emissions in the automobile sector. The recent announcements in France and the United Kingdom to ban conventional gasoline and diesel vehicles by 2040 would enhance regional growth rates, opening up enormous development opportunities for the industry. For example, in 2020, BMW, a German multinational corporation that produces automobiles, announced the launch of its new luxury electric vehicle. This i4 can travel up to 590 kilometers on a single charge. Several new product introductions are expected to boost sales in the Western European market because traction batteries are widely employed in these vehicles.

North American traction battery market is driven by several factors including increased adoption of electric vehicles (EVs), government efforts supporting clean energy, breakthroughs in battery technology, and a growing awareness of environmental sustainability. Federal tax credits for electric vehicles have significantly boosted their use in the United States. These incentives assist customers and help the car industry transition to electric propulsion, which drives demand for traction batteries.

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Traction Battery Market Segmental Analysis

The global traction battery market is segmented based on product type, capacity, and application.

By Product Type

The market is further segmented into Lead acid-based, nickel-based, and Lithium-ion-based.

Lead Acid Based generates the most revenue in the market. Lead-acid batteries have long been the preferred choice for various applications, including automotive and industrial use. These batteries use a Lead dioxide cathode, a sponge metallic lead anode, and a sulfuric acid electrolyte. They are noted for their dependability, affordability, and widespread availability. Lead-acid batteries are well-suited to applications where weight is not an issue, such as internal combustion engine vehicles, uninterruptible power supply (UPS) systems, and industrial equipment. Despite having a lower energy density than newer technologies, lead-acid batteries are helpful in specific applications due to their established technology and economic benefits.

Nickel batteries come in various chemistries, including nickel-metal hydride (NiMH) and nickel-cadmium (NiCd). Nickel-based batteries have a higher energy density than lead-acid batteries and are noted for longevity and dependability. Nickel-metal hydride batteries, in particular, became popular in early hybrid electric vehicles (HEVs) and consumer devices. However, as lithium-ion batteries have become more popular, their use has reduced. Nickel-based batteries are regarded as having a lower environmental effect than other alternatives, but their market share has declined due to advances in lithium-ion technology.

By Capacity

The market is segmented into Less than 100 Ah, 100-200 Ah, 200-300 Ah, 300-400 Ah, and 400 Ah and Above.

Less than 100 Ah holds a significant market share. The less than 100 Ah sector was the most significant revenue generator, and it is expected to expand at a considerable CAGR during the projection period. Batteries with a capacity of less than 100 ampere-hours (Ah) are classified as low-capacity traction batteries. These batteries are commonly employed in applications where space and weight are crucial. Some typical applications are small electric cars, portable electronic devices, and supplemental power sources. While they may have range and power output limits, they are appropriate for situations where compactness precedes lengthy operations.

Traction batteries with capacities ranging from 100 to 200 Ah are used in many electric vehicles, including small electric cars and various industrial equipment. This midrange capacity strikes a compromise between size, weight, and performance. Vehicles powered by this group of batteries may have a moderate to good range, making them ideal for urban commuting and specific industrial uses where a more significant capacity is not required.

By Application

The market can be bifurcated into Electric Vehicles (EV), Industrial, and Locomotives.

Electric Vehicle (EV) accounts for the largest share of the market. The electric vehicle segment now leads the global market. Traction batteries for the Electric Vehicle (EV) application segment are specially developed to power electric automobiles, motorbikes, buses, and other electrically powered vehicles. These batteries have a high energy density, allowing electric cars to travel longer between charges. Lithium-ion batteries, in particular, dominate this category due to their lightweight design, rapid charging capabilities, and appropriateness for a wide range of electric vehicles. The EV application category is critical to the ongoing shift to sustainable and emission-free transportation.

The Industrial application category includes using traction batteries in various industrial contexts, including forklifts, warehousing equipment, and other material-handling machines. These batteries are built to resist the demands of industrial activities, providing consistent power over long periods. Lead-acid batteries have long been popular in this market due to their longevity and cost-effectiveness. However, there is an increasing trend toward using lithium-ion batteries in industrial applications, with benefits such as longer cycle life and lower maintenance requirements.

Market Size By Product Type 

Market Size By Product Type 
  • Lead Acid Based
  • Nickel Based
  • Lithium-Ion Based
  • Others

  • List of key players in Traction Battery Market

    1. BAE Batteries GmbH
    2. Banner Batteries Ltd.
    3. Ecovolta, Exide Industries Ltd.
    4. GS Yuasa International Ltd.
    5. HOPPECKE Carl Zoellner and Sohn GmbH
    6. Inci Aku
    7. INTILION GmbH
    8. Leoch International Technology Limited Inc
    9. Toshiba Corporation

    Traction Battery Market Share of Key Players

    Traction Battery Market Share of Key Players

    Recent Developments

    1. October 2023- GS Yuasa Corporation (Tokyo Stock Exchange: 6674) received an order from ENEOS Corporation for lithium-ion storage battery systems (from now on referred to as "these storage systems") for use in power grid stabilization as part of the development of the new ENEOS VPP* business structure.
    2. December 2023- Banner is a leading provider of high-performance energy storage solutions; additionally, its second business unit is pioneering robust electricity storage systems for mobile and fixed applications.

    Traction Battery Market Segmentations

    By Product Type  (2020-2032)

    • Lead Acid Based
    • Nickel Based
    • Lithium-Ion Based
    • Others

    By Capacity  (2020-2032)

    • Less than 100 Ah
    • 100-200 Ah
    • 200-300 Ah
    • 300-400 Ah
    • 400 Ah and Above

    By Application  (2020-2032)

    • Electric Vehicle (EV)
    • Battery Electrical Vehicle (BEV)
    • Plug-in hybrid electrical vehicle (PHEV)
    • Hybrid electrical vehicle (HEV)
    • Forklift
    • Mechanical handling equipment
    • Industrial
    • Locomotives
    • Others

    Frequently Asked Questions (FAQs)

    What is the key driver for the growth of the traction battery market?
    Increasing electric vehicle production is the key driver for the growth of the traction battery market.
    Electric vehicle (EV) is the leading segment for the market during forecast period.
    Key verticals adopting traction battery include: - BAE Batteries GmbH, Banner Batteries Ltd., Ecovolta, Exide Industries Ltd., GS Yuasa International Ltd., Inci Aku, INTILION GmbH, Toshiba Corporation.
    Europe region has the highest growth rate in the traction battery market.
    The global traction battery market size was valued at USD 56.12 billion in 2023. It is projected to reach from USD 67.23 billion in 2024 to USD 285.25 billion by 2032, growing at a CAGR of 19.8% during the forecast period (2024–2032).


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