The global traction batteries market is expected to create an incremental opportunity of US$ 34 Bn by the end of 2022. The demand for traction batteries is estimated to surpass US$ 72 Bn by 2032, expanding at a staggering CAGR of 12% over the forecast period 2022-2032. Increasing shift toward using electrical energy from petroleum product-based energy across the automotive sector is accelerating the sales in the market.
Traction batteries, also known as electric vehicle batteries, refer to an assembly of accumulators constituting the energy storage for powering the traction motors of vehicles. These batteries are gaining immense traction across the automotive sector, owing to their favorable attributes such as high tolerance to overcharging, large current capability, reliability, and rechargeability.
On account of such attributes, they are increasingly adopted in different types of vehicles such as pure electric cars, motorcycles, and hybrid cars among others. Traction batteries are also being used across non-electric automotive vehicles for providing power to lighting, push-button ignition, horns, infotainments systems, and other accessories.
These batteries have huge storage capacity and provide power over a longer period of time in comparison to conventional batteries. Hence, they are finding a wide range of applications across heavy industrial commercial vehicles such as electric tractors, electric forklift trucks, and others, which is in turn, propelling the demand for traction batteries in the market.
In addition, rising introduction of advanced traction batteries such as valve-regulated lead-acid (VRLA) batteries is anticipated to further favor the growth in the market.
Which are Some Prominent Drivers Spearheading Traction Batteries Market Growth?
Growing trend of electrification and rising concerns regarding environmental sustainability has led to a rapid shift towards the adoption of electric and hybrid vehicles across the world. In addition to this, governments in several countries are undertaking a number of initiatives, such as tax exemption, to promote adoption of electric vehicles to decline greenhouse gas emissions across respective nations.
This has resulted in a significant rise in sales of electric and hybrid vehicles worldwide, creating strong demand for associated components. For instance, according to a report by the International Energy Agency (IEA), approximately 2.1 million electric cars were sold across the world, exhibiting exponential year-over-year growth of 40% in 2019.
As traction batteries are extensively deployed in electric vehicles including passenger cars, motorcycles, and commercial vehicles among others accelerate sales of these automobiles are projected to create lucrative growth opportunities in the market.
Also, rapid expanding manufacturing sector and escalating e-commerce business activities are encouraging industrial players to adopt assistive equipments such as electric forklifts to enhance operational, which is in turn, bolstering the sales of traction batteries.
What are the Challenges Faced by the Traction Batteries Market?
Despite several advantages associated with traction batteries, extravagant cost, performance decline with time, need for higher protection, heavyweight, high fragility, and risk of explosion in high-temperature areas are factors hindering the sales in the market.
In addition, lack of charging infrastructure for electric and hybrid vehicles, especially across developing economies such as India, Thailand, Australia, China, Brazil, and others is restraining the sales of electric vehicles, with is in turn, hampering the demand for traction batteries.
Why is Western Europe Emerging as an Opportunistic Traction Batteries Market?
As per FMI, Western Europe is anticipated to emerge as a highly remunerative market for traction batteries over the forecast period 2022-2032.
With growing concerns regarding carbon emission and rising prices of fuel such as gasoline and diesel, consumers across the countries such as Germany, the U.K., Italy, and France among others are increasingly adopting electric vehicles. Citing this trend, numerous automotive manufacturers are aiming at launching their novel electric vehicles to meet the surging demand.
For instance, in 2020, BMW, a German multinational corporate manufacturer of automotive vehicles, announced launching its new luxury electric vehicle, i4, which can cover up to 590 km distance in a single charge. As traction batteries are extensively used in these automobiles, a multiplicity of such product launches are estimated to augment the sales in the Western Europe market.
How is Asia Pacific Excluding Japan Contributing to the Growth of the Traction Batteries Market?
Future Market Insights states that Asia Pacific excluding Japan is forecast to exhibit robust growth in the global traction batteries market between 2022 and 2032.
A swift rise in sales of electric vehicles is being witnessed in countries such as China, India, Australia, and South Korea, owing to the surging trend of electrification and increasing government efforts for promoting electric vehicles is propelling the demand for traction batteries.
Hence, leading players in the market are increasingly aiming at launching novel products to capitalize on the existing opportunities. For instance, in 2021, Birla Carbon, an Indian manufacturer of sustainable products announced launching new automotive lead-acid and lithium-ion batteries, Conductex I and Condectex e. Such product launches are estimated to bolster the growth of traction batteries in the Asia Pacific excluding Japan market.
Market Competition
Some of the leading players in the traction batteries market are Banner Batteries (GB) Ltd., ECOVOLTA, Leoch International Technology Ltd. Inc., GS Yuasa International Ltd., Exide Industries Ltd, HOPPECKE Carl Zoellner & Sohn GmbH, Toshiba Corporation, BAE Batteries GmbH, Inci GS Yuasa, and INTILION GmbH.
Attributed to the presence of such high number of participants and growing emphasis on launching novel high performance batteries, the market is highly competitive.
