Global Traction Battery Market Share, Size, Forecast by 2025

The traction battery market is expected to witness significant growth owing to fast paced electrification in the transport sector. There is an increasing penetration of different kinds of electric vehicles such as electric cars, electric forklifts, e-bikes, e-scooters, e-motorcycles, and others. For instance, nearly 3 million electric cars were sold globally in 2020.

Traction battery or electric vehicle battery (EVB) is generally used to supply power to the electric motors of battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs). These are designed to give power over sustained periods of time and are characterized by their specific energy, energy density, and relatively high power-to-weight ratio.

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Increasing utilization of electric forklifts in material handling in industries due to their high efficiency as compared to ICE forklifts should accelerate industry growth. According to Global Market Insights, Inc., forecast, global traction battery market size is expected to surpass US$35 billion by 2024 across all applications.

Increased government initiatives to uplift the electric vehicle industry and the rising environmental concerns due to the emission produced by petroleum fuel vehicles are some major factors driving EV penetration in the market. Moreover, novel technological advancements in batteries by leading automakers should further complement the traction battery industry trends.

For example, the prominent electric vehicle and clean energy company Tesla in 2020, announced the development of a ‘tabless’ battery cell that could improve an electric vehicle’s range and power. The battery is expected to reduce the cost and allow the company to sell EVs at the price of gasoline-powered vehicles.

Increasing demand for Li-ion batteries is observed due to their lower cost and high efficiency as compared to others. Many traction batteries are usually rechargeable lithium-ion batteries that are specifically designed for a high ampere-hour capacity. Owing to the higher energy density and prolonged life, li-ion traction batteries are highly adopted in EVs. Recent EVs are increasingly using new variations on li-ion chemistry that compromise specific power and energy to provide environmental friendliness, fire resistance, rapid charging, and longer lifespans.

Asia Pacific traction battery industry is likely to grow considerably owing to the growing adoption of electric vehicles in major economies like India, China, and Japan. For instance, as per the Institute of Electrical and Electronics Engineers (IEEE), Tesla electric vehicle sales in China were valued at around US$6.6 billion in 2020. Moreover, increasing disposable income, favorable economic conditions, and robust urbanization are some major factors complementing the regional industry landscape.

The restriction on public movement and industrial operations due to the COVID-19 pandemic might have impacted the demand and supply of batteries to some extent. Vehicle production witnessed a notable setback during 2020–2021. However, increasing government initiatives to ease down restrictions on industrial operations and public movement should bring rapid revival in industry over the coming years.