The global traction batteries market is entering an era of remarkable growth, fueled by the global transition toward electrification and clean mobility. Valued at USD 27.5 billion in 2020, the market is projected to reach USD 39.9 billion in 2025 and soar to an impressive USD 178.9 billion by 2035, expanding at a CAGR of 13.3%. This surge marks a pivotal shift in the energy landscape as governments, automakers, and manufacturers accelerate efforts to build a sustainable, emission-free future.

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Powering the Future of Mobility

Traction batteries—commonly known as electric vehicle (EV) batteries—are the heartbeat of electric mobility. They power electric cars, buses, forklifts, and even industrial machinery, enabling clean and efficient operations. Unlike conventional batteries, traction batteries offer exceptional power capacity, high current tolerance, and remarkable rechargeability. These features make them indispensable in industries ranging from automotive and logistics to manufacturing and rail transport.

As EV adoption continues to break records, traction batteries have become the cornerstone of this revolution. From electric cars to industrial forklifts, their applications are expanding rapidly, supported by continuous advancements in chemistry and design.

Lead-Acid and Lithium-Ion Technologies Define Industry Momentum

Among various technologies, lead-acid batteries remain a trusted solution due to their affordability and reliability. With a recycling rate of over 95%, they represent one of the most sustainable battery types in circulation. Established brands like Exide Industries and Clarios are reinforcing their leadership by investing in extended-life lead-acid batteries and maintenance-free designs. Their robust performance and mature recycling infrastructure ensure their continued dominance in industrial and traction applications.

Simultaneously, lithium-ion batteries are reshaping the industry with their unmatched energy density and lightweight structure. Companies such as CATL, LG Energy Solution, and Tesla are pushing the boundaries of innovation by developing high-performance lithium-ion and LFP batteries that deliver longer driving ranges and faster charging. Their rise symbolizes the market’s shift toward energy efficiency and next-generation mobility solutions.

Industrial and Regional Growth on the Rise

The traction batteries market is witnessing strong demand from material handling and industrial automation sectors. Equipment such as electric forklifts, automated guided vehicles (AGVs), and warehouse systems increasingly depend on traction batteries to operate efficiently and sustainably. Manufacturers like Toyota Material Handling and Jungheinrich AG are at the forefront, integrating advanced energy systems into their equipment to boost productivity and reduce emissions.

Regionally, China leads the global traction battery market, driven by manufacturing powerhouses like BYD and CATL, which continue to expand their production capacities. In the United States, gigafactory expansions by Tesla, LG Energy Solution, and Panasonic are reinforcing the country’s self-reliance and supply chain resilience. Meanwhile, South Korea’s collaborations between Hyundai, SK On, and Samsung SDI highlight its growing influence in next-generation battery development.

New Entrants and Expanding Players Accelerate Innovation

The market is not just about established giants. New and mid-sized players are stepping into the spotlight, driven by innovation and ambition. Companies like Unik Batteries Pvt. Ltd., Bater, and UBT Batteries Pvt. Ltd. are investing in research and production technologies to strengthen their foothold. Their focus on modular designs, sustainable chemistries, and customized battery systems reflects a global push toward cleaner, smarter energy storage.

In October 2023, Unik Batteries announced major innovations in modular battery design, emphasizing efficiency and longevity. Similarly, Exide Industries’ Rs 1,000 crore investment in lithium-ion cell manufacturing marks a bold move to expand its footprint in the EV ecosystem, signaling the convergence of tradition and technology in the energy transition era.