Press Release, 21 January 2025
The global traction battery market, valued at USD 27.5 billion in 2020, is set to witness substantial growth over the next decade. Demand is forecasted to surge to USD 39.9 billion in 2025, and the market is expected to achieve a remarkable valuation of USD 178.9 billion by 2035, registering an impressive compound annual growth rate (CAGR) of 13.3% during the assessment period. This robust growth underscores the accelerating adoption of traction batteries across various applications, including electric vehicles (EVs), industrial equipment, and advanced mobility solutions.
Traction batteries, also known as electric vehicle batteries, play a pivotal role in powering propulsion systems. Their high tolerance to overcharging, substantial current capability, and superior recharge ability make them indispensable in the automotive and industrial sectors. These batteries are not only utilized in fully electric and hybrid vehicles but also in non-electric vehicles, providing energy for lighting, push-button ignitions, infotainment systems, and other accessories.
The market is witnessing a significant shift driven by advancements in battery technology, including the development of valve-regulated lead-acid (VRLA) batteries and lithium-ion systems. The increased energy storage capacity and ability to provide power over extended periods make traction batteries the preferred choice for applications such as electric tractors, forklifts, and heavy-duty vehicles. This transition aligns with the global push for sustainable and emission-free transportation solutions.
The growing focus on reducing carbon footprints and the implementation of stringent environmental regulations have further propelled the traction batteries market. Governments worldwide are offering incentives and subsidies to promote the adoption of electric vehicles, thereby fostering the demand for traction batteries. This trend is expected to gain momentum over the forecast period, transforming the landscape of global mobility and industrial operations.
Key Takeaways from the Market Study
- The global traction batteries market is projected to grow at a CAGR of 13.3% from 2025 to 2035, reaching a valuation of USD 178.9 billion by the end of the forecast period.
- Demand for traction batteries in 2025 is expected to stand at USD 39.9 billion, reflecting increased adoption in electric and hybrid vehicles.
- Advancements in battery technologies, including VRLA and lithium-ion batteries, are driving market growth by offering enhanced energy efficiency and durability.
- Traction batteries are increasingly being used across a variety of sectors, including automotive, industrial, and heavy-duty commercial vehicles, to meet the rising demand for efficient and eco-friendly energy solutions.
“According to industry analysts, the traction batteries market is poised for exponential growth as the global transition towards green energy accelerates. The rapid electrification of transportation and industrial sectors is creating unprecedented demand for high-performance energy storage solutions. Analysts highlight that while lithium-ion batteries dominate the market, ongoing research and development in solid-state and next-generation battery technologies are likely to further revolutionize the industry.” Opines Nikhil Kaitwade, Associate Vice President at Future Market Insights (FMI).
Component Insights
Traction batteries are a complex assembly of components designed to deliver optimal performance across various applications. Key components include battery cells, management systems, and thermal management solutions. Battery cells, particularly lithium-ion cells, are the cornerstone of modern traction batteries due to their high energy density and long cycle life.
Battery management systems (BMS) play a critical role in ensuring the safety and efficiency of traction batteries by monitoring charge levels, temperature, and voltage. Advanced thermal management solutions are becoming increasingly important as they enhance the reliability and lifespan of batteries by maintaining optimal operating temperatures. The integration of these components is driving the development of robust and high-performing traction batteries, catering to the diverse needs of automotive and industrial users.
To Gain In-Depth Insights on Market, Browse Complete Report: https://www.futuremarketinsights.com/reports/traction-batteries-market
Market’s Prime Determinants of Trends and Opportunities
The traction batteries market is influenced by several key trends and opportunities, including:
- Shift towards Sustainable Transportation: The global emphasis on reducing carbon emissions has significantly increased the adoption of electric vehicles, driving the demand for high-capacity traction batteries.
- Technological Advancements: Innovations in battery chemistry, such as solid-state batteries and enhanced lithium-ion systems, are unlocking new possibilities for improved performance and efficiency.
- Government Incentives: Subsidies, tax benefits, and investments in charging infrastructure by governments worldwide are bolstering the growth of the traction batteries market.
- Expansion of Industrial Applications: Beyond automotive uses, traction batteries are finding applications in electric forklifts, industrial equipment, and off-highway vehicles, broadening their market scope.
Key Companies & Market Share Insights
- Unik Batteries Pvt. Ltd.
- EXIDE INDUSTRIES LTD.
- Bater
- Microtex Energy Private Limited
- Yuki Electric India Pvt Ltd.
- Watrana Traction Pvt Ltd
- UBT Batteries Pvt. Ltd.
- akkuteam Energietechnik GmbH
- Rico
- Tianneng
Growth Drivers
Several factors are contributing to the rapid expansion of the traction batteries market:
- Rising Electric Vehicle Sales: The global push for EV adoption is the primary driver of traction battery demand, with automakers focusing on electrification to meet environmental regulations.
- Improved Battery Efficiency: Enhanced energy densities and longer lifespans of modern traction batteries are increasing their adoption across various applications.
- Charging Infrastructure: The development of robust charging networks is addressing range anxiety, boosting consumer confidence in EVs and, consequently, traction batteries.
Regional Analysis of Traction Batteries Market
The traction batteries market exhibits significant regional variation, with Asia-Pacific, North America, and Europe emerging as key contributors to global growth.
- Asia-Pacific: Dominates the market, driven by high EV adoption rates in countries like China, Japan, and South Korea. The presence of leading battery manufacturers and government initiatives promoting clean energy are key growth factors.
- North America: The U.S. and Canada are witnessing increasing demand for electric vehicles and industrial equipment powered by traction batteries. Favorable policies and investments in battery manufacturing facilities are further fueling regional growth.
- Europe: The region is at the forefront of sustainability initiatives, with stringent emission regulations and incentives for EV adoption. Countries such as Germany, Norway, and the Netherlands are leading the transition to battery-powered mobility.
- Rest of the World: Emerging economies in Latin America, the Middle East, and Africa are gradually adopting traction batteries, driven by increasing investments in infrastructure and growing awareness of sustainable energy solutions.
Key Segmentation
By Product Type:
The product type is further categorized into lead acid, nickel based, lithium-ion, and others.
By Application:
The application is classified into electric vehicle (EV), battery electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV), hybrid electric vehicle (HEV), industrial, forklift and others.
By Capacity:
The capacity is classified into less than 100 Ah, 100-200 Ah, 200 Ah-300 Ah, 300-400 Ah.
By Region:
Regions considered in the study include North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia & Pacific, and the Middle East and Africa.
