Traction Battery Global Market Opportunities and Strategies to 2034

This report describes and explains the traction battery market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global traction battery market reached a value of nearly $39.91 billion in 2024, having grown at a compound annual growth rate (CAGR) of 9.23% since 2019. The market is expected to grow from $39.91 billion in 2024 to $66.79 billion in 2029 at a rate of 10.85%. The market is then expected to grow at a CAGR of 10.33% from 2029 and reach $109.22 billion in 2034.

Growth in the historic period resulted from rising demand for electric vehicles, increasing investments by governments and growing regulatory push for zero-emission vehicles. Factors that negatively affected growth in the historic period were regulatory hurdles and infrastructure limitations.

Going forward, increasing demand for sustainable transportation, expansion of electric commercial vehicles and logistics fleets, rising environmental regulations and emission requirements and expansion of fast-charging and battery swapping infrastructure will drive growth. Factors that could hinder the growth of the traction battery market in the future include competition from alternative powertrains, unresolved environmental impacts and impact of trade war and tariff.

Asia-Pacific was the largest region in the traction battery market, accounting for 34.93% or $13.94 billion of the total in 2024. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the traction battery market will be Asia-Pacific and Africa where growth will be at CAGRs of 13.39% and 11.53% respectively. These will be followed by Western Europe and Middle East where the markets are expected to grow at CAGRs of 11.04% and 10.78% respectively.

The global traction battery market is fairly fragmented, with a large number of small players operating in the market. The top 10 competitors in the market made up 22.57% of the total market in 2024. CATL (Contemporary Amperex Technology Co. Limited) was the largest competitor with a 5.29% share of the market, followed by BYD Company Limited with 4.32%, CALB (China Aviation Lithium Battery Co.) with 2.72%, LG Chem Ltd. (LG Energy Solution), with 2.35%, Leoch International Technology Limited, with 1.68%, GS Yuasa International Ltd. with 1.45%, Samsung SDI Co. Ltd. with 1.44%, Gotion High-tech with 1.23%, Panasonic Corporation with 1.16% and Exide Industries Limited with 0.93%.

The traction battery market is segmented by product type into lead-acid based, Li-ion based, nickel based and other types. The Li-ion based market was the largest segment of the traction battery market segmented by product type, accounting for 51.83% or $20.68 billion of the total in 2024. Going forward, the Li-ion based segment is expected to be the fastest growing segment in the traction battery market segmented by product type, at a CAGR of 15.05% during 2024-2029.

The traction battery market is segmented by capacity into less than 100 Ah, 100 - 200 Ah, 200 - 300 Ah, 300 - 400 Ah and 400 Ah And above. The less than 100 Ah market was the largest segment of the traction battery market segmented by capacity, accounting for 30.95% or $12.35 billion of the total in 2024. Going forward, the 400 Ah And above segment is expected to be the fastest growing segment in the traction battery market segmented by capacity, at a CAGR of 17.31% during 2024-2029.

The traction battery market is segmented by application into electrical vehicle (EV), hybrid electric vehicles (HEV), industrial, forklift, mechanical handling equipment and other applications. The electrical vehicle (EV) market was the largest segment of the traction battery market segmented by application, accounting for 49.62% or $19.8 billion of the total in 2024. Going forward, the electrical vehicle (EV) segment is expected to be the fastest growing segment in the traction battery market segmented by application, at a CAGR of 14.57% during 2024-2029.

The top opportunities in the traction battery market segmented by product type will arise in the Li-ion based segment, which will gain $21.01 billion of global annual sales by 2029. The top opportunities in the traction battery market segmented by capacity will arise in the 400 Ah And above segment, which will gain $6.94 billion of global annual sales by 2029. The top opportunities in the traction battery market segmented by application will arise in the electrical vehicle (EV) segment, which will gain $19.29 billion of global annual sales by 2029. The traction battery market size will gain the most in the USA at $4.01 billion.

Market-trend-based strategies for the traction battery market include development of battery-electric rail solutions, advancing electric traction battery industrialization, development of ultra-fast charging EV batteries, expansion of hybrid battery for plug-in hybrid electric vehicles (PHEVs), advancing lead-acid auxiliary battery enhancements and adoption of high-energy-density batteries for electric commercial vehicles.

Player-adopted strategies in the traction battery market include focus on strategic partnerships, expanding its operational capabilities through new launches and through new investments.

To take advantage of the opportunities, the analyst recommends the traction battery market companies to focus on expanding battery-electric rail solutions, focus on scaling industrial production capacity for traction batteries, focus on advancing ultra-fast charging battery development, focus on developing advanced hybrid battery solutions, focus on enhancing lead-acid auxiliary battery performance, focus on developing high-energy-density batteries for commercial EVs, focus on expanding the Li-Ion based traction battery segment, focus on expanding in the 400 Ah and above traction battery segment, expand in emerging markets, continue to focus on developed markets, focus on strengthening distribution and market access channels, focus on competitive and value-based pricing strategies, focus on strengthening market awareness through targeted promotion, focus on leveraging digital platforms for demand generation and focus on expanding in the electric vehicle traction battery segment.