The global traction battery market is set to witness robust growth, projected to rise from $43.78 billion in 2025 to $66.28 billion by 2029, registering a CAGR of 10.9%, according to The Business Research Company’s latest report.
The market expansion is being driven by the accelerating adoption of electric vehicles (EVs), advancements in charging infrastructure, increased focus on battery recycling and sustainability, and the emergence of high-energy-density battery technologies.
A sharp rise in EV demand is a key growth driver. For example, Sustainable Bus reported a 53% year-on-year surge in electric bus registrations in Europe in 2023. This demand is expected to boost the requirement for traction batteries across passenger vehicles, commercial EVs, and industrial applications.
Major players shaping the industry include Amara Raja Batteries Limited, BYD Company Limited, GS Yuasa International Ltd., Exide Industries Limited, and EnerSys. Technological innovation remains central, with companies introducing lighter, longer-lasting, and more adaptable battery solutions. In March 2022, Greece-based Sunlight Group Energy Storage Systems launched the ElectroLiFe semi-traction Li-ion battery, featuring tool-free installation, cloud connectivity, and a lifespan exceeding 2,000 cycles.
The market is segmented by product type (lead acid, Li-ion, nickel-based, and others), capacity (below 100 Ah to above 400 Ah), and application (EVs, hybrid vehicles, industrial machinery, and more). Li-ion batteries—especially LFP and NMC chemistries—are expected to dominate future growth due to their superior energy density and charging efficiency.
Regional Outlook: North America led the market in 2024, with steady growth expected. However, Asia-Pacific is forecast to witness the fastest expansion, supported by rapid EV adoption in China and India.
The report highlights that continuous innovation, second-life battery usage, and upscaling production capacity will be pivotal for companies aiming to capture market share in this high-growth sector.
