Traction Battery Market Estimation Worth $69.2 Billion by 2030

Global Traction Battery Market projected to grow at a CAGR of 8.2% from 2021 to 2030

WILMINGTON, DE, UNITED STATES, December 12, 2024 /EINPresswire.com/ --

According to a new report published by Allied Market Research, the global traction battery market size was valued at $31.6 billion in 2020, and is projected to reach $69.2 billion by 2030, growing at a CAGR of 8.2% from 2021 to 2030.

Traction battery, also known as electric-vehicle battery, is used to power electric motors of both hybrid and electric vehicles. It is usually rechargeable and specially designed for high ampere-hour capacities.

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Asia-Pacific accounted for 54.5% of traction battery market share in 2020, in terms of revenue, growing at a CAGR of 8.9%, owing to increasing demand for traction battery in sectors, such as automotive and transportation, industrial manufacturing, railways, and others, which is the key market trend in the global market.

The growing population has surged the automotive and transportation sector where traction battery is widely used for powering electric motor in forklift trucks.

For instance, according to a report published by Indian Ministry of Commerce and Industry, the transport sector in India is expected to grow at a compound annual growth rate of 5.9%. This may act as one of the key drivers responsible for the growth of the traction battery market.

Key players operating in the global traction battery industry include Exide Industries Ltd., ECOVOLTA, GS Yuasa International Ltd., HOPPECKE Carl Zoellner & Sohn GmbH, Banner Batteries (GB) Ltd., BAE Batteries GmbH, Toshiba Corporation, INTILION GmbH, Leoch International Technology Limited Inc., and Inci GS Yuasa.

Governments of different countries have emphasized on reducing emissions from the automobile & transportation sector. Several regulatory bodies, such as the United States Environmental Protection Agency (U.S. EPA), European Union (EU), and others, have laid down acts and regulations to reduce the emission levels caused due to vehicles. This has led the government to increase awareness of electric vehicles in developed and developing economies.

The electric vehicle industry is primarily driven by attractive government policies and tax incentives for manufacturers and customers of the electric vehicle sector.

For instance, according to a report published by the U.S. Department of Energy, a minimum tax credit amount of $2,500 (and maybe up to $7,500) is available on the purchase of a new electric vehicle that uses a traction battery with at least five kilowatt-hour (kWh) of capacity. These factors are predicted to notably contribute to the global market.

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The increasing demand for electric vehicles has surged the R&D activities for enhancing battery efficiencies by improving the charge cycle and reducing the unit consumption per charge.

The emergence of batteries with high energy density has increased the competition among the traction battery manufacturers for producing highly efficient traction batteries for electric and hybrid vehicles.

For instance, according to an article published by International Industrial Vehicle Technology, Ecovolta, a leading manufacturer of battery systems, has launched a new range of traction batteries known as evoTraction battery that can replace lead-acid batteries with a standardized lithium-ion battery, thus cutting costs per charge cycle by up to 50%.

Customers are becoming more linear toward purchasing lithium-ion traction batteries, owing to their lightweight and long-lasting battery life. All these factors are expected to offer future growth opportunities to the global traction battery market trends.

The development of charging infrastructure for electric vehicles is a significant setback in many countries, owing to lack of space, investments, electrification, and others.

According to an article published by Forbes, around 35 million electric vehicles will be sold by 2030 in the U.S. that will require 50,000 direct current fast charging (DCFC) stations and 1.2 million level 2 ports. This means approximately 380 electric vehicle charging ports need to be installed each day for the next nine years but in comparison, the U.S. has installed an average of 30 level 2 ports per day between 2010 and 2020.

Economies, such as China, and India, are expected to drive the demand for traction battery. There is significant increase in energy demand in countries, such as China and India, owing to rise in investment in traction battery projects.

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The residential and industrial sectors are expected to consume more energy during the forecast period in Asia-Pacific. Furthermore, India has significant growth potential; however, due to its inconsistent policy and business environment in past, the traction battery share in total energy production was less. There has been an increase in investments in traction battery projects in India, owing to which it is one of the countries experiencing rapid growth in the Asia-Pacific market.

By application, the market is fragmented into electrical vehicle, industrial, locomotives, and others. The electrical vehicle application is anticipated to register the highest CAGR of 8.5% during the forecast period.

The increasing fuel prices, owing to several geopolitical issues have led the customers to become more linear toward purchasing electric vehicles, which, in turn, may provide an additional push to the growth of the traction battery market for electric vehicles.

Attractive government incentives provided on the purchase of electric vehicles is anticipated to open up new opportunities for the market during the forecast period.

By capacity, the market is segregated into less than 100 Ah, 100 – 200 Ah, 200 – 300 Ah, 300 – 400 Ah, and 400 Ah & above. The less than 100 Ah capacity is anticipated to register the highest CAGR of 8.5% during the forecast period.

Traction battery with less than 100 Ah capacity offers easy swapping and removing, low price, less space requirement, and lightweight, making the key automotive manufacturers use small capacity traction batteries for reducing the overall weight of the vehicle, thereby improving the mileage.

By product type, the market is segregated into lead acid based, nickel based, lithium-ion based, and others. The lead acid based segment dominated the global market in terms of revenue in 2020, with over two-fifth of the total share.

The lithium-ion segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 9.5% from 2021 to 2030.

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Factors, such as low price, high cyclability, and high vibration resistance, make the customers linear toward purchasing lead acid-based traction batteries. This may provide an additional push to the growth of the traction battery market. In addition, lead acid-based traction batteries are accepted as a reliable and robust power source for electric vehicles, e-bikes, floor scrubbers, and others.

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