Traction Battery Market Size to Hit USD 495.50 Bn By 2034

 The global traction battery market size is valued at USD 73.65 billion in 2024 and is expected to hit around USD 495.50 billion by 2034, with a CAGR of 21% from 2024 and 2034.

Due to the widespread use of traction batteries in electric and hybrid vehicles, the market is anticipated to expand throughout the forecast period. The global need for traction batteries is a result of their strong demand in the manufacturing and automotive sectors. The traction battery is also recyclable and safe for the environment. It is anticipated that the electrification of transportation and increased investment would enhance demand throughout the projected period, contributing to the growth of the electric vehicle.

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Key Takeaways:

• Asia-Pacific has generated the maximum market share in 2023.
• By Application, the electrical vehicle segment has captured more than 77% of the market share in 2023.
• By Product Type, the lead acid-based segment has contributed the most revenue in 2023 and is expected to expand at the fastest CAGR from 2024 to 2034.
• By Capacity, the less than 100 Ah segment accounted for the largest revenue in 2023 and is predicted to expand at the quickest CAGR from 2024 to 2034.

Regional Stance

Asia-Pacific led the market in 2023 and is anticipated to expand at a CAGR of 8.9% during the forecast period. The growing demand for consumer goods in countries like China, India, and others that use traction batteries to power industrial equipment systems has spurred the growth of the industrial manufacturing sectors. This may stimulate the Asia-Pacific region's demand for traction batteries.

Market Overview

Traction batteries, which are rechargeable batteries (HEV), power the electric motors in battery electric vehicles (BEV) and hybrid electric vehicles (HEV). Lithium-ion batteries, which have a great quantity of energy storage capacity, are mostly used in their production. Traction batteries are different from starting, lights, and ignition (SLI) batteries because they are deep-cycle batteries designed to supply electricity for long periods of time. Traction batteries have high specific energy, high energy density, and high power-to-weight ratios. Since they allow for lighter, quicker vehicle operation, smaller, lighter batteries are preferred. Most battery technologies today have far lower specific energies than liquid fuels. This frequently affects the maximum range of electric-only vehicles. The most common traction battery types in modern electric vehicles are lithium-ion and lithium polymer batteries. This is because despite their diminutive size, they are packed with vitality. Lead-acid, nickel-cadmium, nickel-metal hydride, and, less frequently, zinc-air and sodium nickel chloride batteries are other types of batteries used in electric vehicles. The amount of electricity (or electric charge) stored in batteries is measured in ampere-hours or coulombs (kWh), while the total amount of energy is typically measured in kilowatt-hours (kWh).

Traction Battery Market Growth Factors:

Due to the rising volatility of fuel prices and growing environmental consciousness, there is a larger demand for the electric vehicles. Additionally, factors like the increased investment and the electrification of transportation will promote the growth of electric vehicles. Traction batteries, which power the electric motors in electric or hybrid vehicles, have increased significantly along with the market for electric vehicles. This may be one of the primary driving forces behind the market growth for traction batteries. Additionally, attributes like affordability, eco-friendliness, and recyclability are accelerating the industry's growth in the electric vehicle category and, as a result, the market's expansion.

Report Highlights:

• On the basis of Application, the electric vehicle market sector dominated the global traction battery market in 2022. Due to rising demand from end-use sectors like automotive, consumer electronics, medical equipment, and appliances, the segment is predicted to have substantial expansion. Growing government attempts to reduce carbon emissions are also probably to benefit the sector.
• On the basis of Product Type, in 2022, over the course of the anticipated term, the lead acid-based segment, which brought in the most money, is anticipated to grow at a fastest CAGR. The prevalence of lead acid-based traction batteries in road vehicles, locomotives, industrial forklift trucks, and other vehicles has sped up the expansion of the automotive and transportation sectors.
• On the basis of Capacity, in 2022, less than 100 Ah was the largest revenue-generating market, and it is projected to expand at a quickest CAGR over the forecast period. SLI applications in the automotive sector are expanding, as are the creation of renewable energy sources and energy storage technologies, which are in great demand. The growth of the telecom sector in nations like the U.S., Brazil, India, and the UK is driving up the need for UPS systems as a backup power source, which in turn is driving up the use of lead-acid batteries as a competitively priced energy source.

Traction Battery Market Scope

Report Coverage	Details
Market Size in 2024	USD 73.65 Billion
Market Size in 2034	USD 495.50 Billion
Growth Rate from 2024 to 2034	CAGR 21%
Largest Market	Asia Pacific
Segments Covered	Product Type, Capacity and Application

Market Dynamics:

Driver: Growing Demand for Electric Vehicles (EVs)

The global demand for electric vehicles (EVs) is the primary factor driving the traction battery industry. EVs have gained popularity as an alternative to conventional gasoline-powered vehicles as governments and businesses concentrate on lowering carbon emissions and encouraging sustainable transportation. In order to power their electric motors, traction batteries are a crucial part of EVs.

Various causes, such as government incentives and legislation, technology breakthroughs, and shifting customer preferences, have fueled the demand for EVs. Numerous countries all around the world have put policies into place to encourage the use of EVs, including tax incentives, subsidies, and rules requiring automakers to produce a specific proportion of EVs. These policies have aided in boosting traction by increasing demand for electric vehicles.

The demand for EVs and traction batteries has also been significantly influenced by technological improvements. The range and performance of EVs have increased due to the development of more effective and long-lasting batteries, making them more useful for daily use. Additionally, improvements in the infrastructure for charging EVs have made it simpler for people to do so, adding to their allure.

Restraint: Limited Range

The limited range of EVs in comparison to conventional gasoline-powered cars is another important barrier for the market for traction batteries. Although EVs' range has increased recently, many consumers still believe they are less useful for long-distance travel. The existing traction batteries' insufficient capacity and the dearth of adequate charging facilities in many places are responsible for this limited range. For fleet operators, including delivery businesses and taxi services, who need vehicles with large ranges to function successfully, the limited range of EVs is also a significant hurdle. Due to the continued use of gasoline-powered cars by many fleet operators, the market for traction batteries in these regions is constrained.

Opportunity: Energy Storage

The utilisation of EV batteries for energy storage is another major opportunity for the traction battery market. Energy storage solutions are becoming more necessary as the use of renewable energy sources like solar and wind grows. Renewable energy surpluses that cannot be immediately used can be stored in EV batteries and used to power buildings when energy production is low or demand is high. As EV batteries have already been manufactured and have had their prices reduced through government incentives and legislation, using them for energy storage can help bring down the price of energy storage system. Further solution to minimizing the environmental impact of battery manufacture and mining is the use of EV batteries for energy storage. This helps to reduce the demand for fresh battery production.

Challenge: Environmental Impact

The negative effects of battery production and disposal on the environment are among the major difficulties facing the traction battery market. Raw elements like lithium, cobalt, and nickel must be extracted and processed in order to make batteries, which can have negative effects on the environment such as soil erosion, water pollution, and habitat destruction. Additionally, improper battery disposal can release harmful substances into the environment, which can have a huge negative influence on the ecosystem. Several businesses and governments are making investments in more environmentally friendly battery manufacture and disposal techniques to solve these environmental issues. For instance, a number of businesses are creating new battery chemistries, like sodium-ion and magnesium-ion batteries, that employ fewer hazardous ingredients. These batteries are expected to have a lower environmental impact than traditional lithium-ion batteries, making them more sustainable and environmentally friendly.

Recent Developments:

• Sunlight ElectroLiFe, their most recent semi-traction lithium-ion (Li-ion) battery, was introduced in March 2022 by Sunlight Group Energy Storage Systems, a producer of integrated energy storage solutions with headquarters in Greece. The innovative ElectroLiFe lightweight yet sturdy design enables tool-free plug-and-play installation to satisfy changing client needs when utilised in manufacturing and light commercial vehicle applications like AGVs (automated guided vehicles) and other material handling machines. The battery has a longer lifespan of more than 2,000 cycles and can link to GLocal, a cloud platform maintained by Sunlight Group.
• Stangco Industrial Equipment Inc. was purchased by Concentric LLC in August 2021 for an unknown sum. Concentric LLC is a US-based industry pioneer in DC power management for the material handling and critical power sectors. By making this acquisition, Concentric hopes to expand its presence throughout southern California and the west coast market, particularly in the forklift (Motive) Power sector.

Market Key Players:

• BAE Batteries GmbH
• Banner Batteries (GB) Ltd.
• Ecovolta
• Exide Industries Ltd.
• GS Yuasa International Ltd.
• HOPPECKE Carl Zoellner & Sohn GmbH
• Inci Aku
• INTILION GmbH
• Leoch International Technology Limited Inc
• Toshiba Corporation

Market Segmentation:

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 & Above

By Application

• Electric Vehicle (EV)
• Industrial
• Locomotives

By Geography

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

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