Traction Battery Market to Reach USD 220.9 Billion by 2033, Driven by Rising Demand for Electric Vehicles
Published: July 2024
ID: IMR1188
Introduction
The Global Traction Battery Market is projected to grow substantially, with estimations suggesting it will reach a value of approximately USD 220.9 Billion by 2033, up from USD 46.0 Billion in 2023. This growth is anticipated to occur at a robust (CAGR) of 14.6% during the forecast period spanning from 2023 to 2033.
The Traction Battery Market is a market for rechargeable batteries used in electric vehicles (EVs), crucial for their performance, range, and efficiency. The market includes manufacturers, EV manufacturers, and companies involved in battery recycling and second-life applications. As demand for EVs grows due to environmental concerns and government regulations, the market is expanding due to advancements in battery technology. The goal is to develop more efficient and cost-effective batteries to support the widespread adoption of electric vehicles.
Segmentation of the Traction Battery Market
Lead-acid batteries accounted for 44.7% of the market in 2023, with a compound annual growth rate (CAGR) of 7.2%. The industry is expected to grow due to its better vibration resistance, longer life cycle, and lower cost. The automotive and transportation industries are expanding rapidly due to population growth. Lead-acid traction batteries are widely used in industrial forklifts, locomotives, road vehicles, and scrubber dryers. NiMh batteries, with their high energy density and design quality, are more suitable for hybrid electric vehicles (HEVs) due to their greater weight analysis and volumetric energy density. The Indian Ministry of Trade and Industry predicts a 5.9% CAGR growth in the transportation sector, further propelling the lead-acid battery traction battery market.
The global traction market, dominated by less than 100 Ah traction batteries, is expected to grow at an 8.5% CAGR due to the increasing demand for hybrid-electric propulsion devices in small industries. These batteries are typically recommended for cars with traditional internal combustion engines and are ideal for backup rechargeable batteries in non-plug-in hybrid cars like the Honda Civic Hybrid. The market is expected to develop due to the extended lifespan and maximum charge cycle of these batteries, making them an ideal choice for hybrid vehicles.
The traction battery market, dominated by BEVs, is experiencing increased demand due to pollution concerns and the need for electrification. The market is divided into four segments: electrical vehicles, industrial, locomotives, and others. The electric vehicle market is expected to grow at an 8.5% CAGR. Government programs, tax breaks, and manufacturers' efforts to promote EVs in developed countries are driving growth. Rapid industrialization and customer preferences towards electric forklifts are also driving growth in the industrial sector. The rise in e-commerce and the use of electric forklifts is contributing to the market's growth.
Growth Factors of the Traction Battery Market
Rise of Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs): The increasing adoption of EVs and HEVs is a significant driver for the traction battery market. These vehicles require traction batteries to store and deliver electrical energy for propulsion. Technological advancements in battery technology, such as improved energy density, longer driving ranges, and faster charging times, have made EVs more viable for everyday use, boosting consumer confidence and demand for these batteries.
Government Incentives and Environmental Regulations: Many governments are offering incentives and subsidies to promote the adoption of electric and hybrid vehicles as part of their efforts to reduce greenhouse gas emissions and dependence on fossil fuels. These supportive policies are encouraging consumers and manufacturers to shift towards cleaner transportation options, thereby driving the demand for traction batteries.
Expansion of Charging Infrastructure: The growth of infrastructure for electric vehicle charging stations is also propelling the traction battery market. As more charging stations become available, the convenience of owning and operating an EV increases, which in turn boosts the demand for traction batteries.
Growth in Industrial Applications: Beyond automotive applications, traction batteries are increasingly used in industrial sectors. They power a variety of industrial equipment such as forklifts, mechanical handling equipment, and locomotives. The growth of industrial manufacturing sectors, especially in emerging economies like China and India, is driving the demand for these batteries.
Technological Advancements: Continuous improvements in battery technology are enhancing the performance and safety of traction batteries. Developments in lithium-ion batteries, in particular, are leading to better energy storage solutions with higher efficiency and longer lifespans, making them more attractive for both automotive and industrial applications.
Regional Analysis
The Asia-Pacific traction battery market is projected to grow at an 8.9% CAGR, holding a 55.1% market share in 2023. This growth is driven by consumer goods demand in China and India, as well as the growing popularity of electric vehicles and the need for charging infrastructure. The European traction battery market, valued at over USD 6 billion in 2022, is also expected to grow due to increasing sales of electric vehicles and stringent regulations.
List of Market Segmentation
By Type
o Lead-acid based
o Nickel based
o Lithium-ion based
o Other Types
By Capacity
o Less than 100 Ah
o 100-200 Ah
o 200 Ah-300 Ah
o 300-400 Ah
o 400 Ah & above
By Application
o Electrical vehicle (EV)
o Battery Electrical Vehicle (BEV)
o Plug-in hybrid electrical vehicle (PHEV)
o Hybrid electrical vehicle (HEV)
o Industrial
o Forklift
o Mechanical handling equipment
o Others
o Locomotives
o Other Applications
Competitive Landscape
Johnson Controls, East Penn Manufacturing, Exide, Samsung, Hitachi, BYD Company, LG Chem, Panasonic, Enersys, Systems Sunlight, Other Key Players