Global Traction Battery Market - Industry Size, Share, Trends, Opportunities, and Forecast, 2021-2031F | EV Demand and LFP, Solid-State Advances Propel Market to $98.96 Billion
Dublin, Oct. 23, 2026 (GLOBE NEWSWIRE) -- "Traction Battery Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031F" has been added to ResearchAndMarkets.com's offering.
Global Traction Battery Market Overview: The Global Traction Battery Market is projected to grow from USD 41.70 Billion in 2025 to USD 98.96 Billion by 2031, registering a CAGR of 15.49%. Market expansion is being supported by rising electric vehicle adoption, strict government emissions standards, financial incentives for e-mobility and continued investment in battery manufacturing capacity.
Traction batteries provide rechargeable energy storage for electric vehicles, industrial machinery and locomotives. As countries pursue decarbonization targets, automotive manufacturers are accelerating the transition to electrified powertrains, creating sustained demand for high-capacity battery systems. According to the China Automotive Power Battery Industry Innovation Alliance, cumulative power battery installations in China reached 548.4 GWh in 2024, representing a 41.5% year-on-year increase.
Market Drivers: Rapid growth in the electric vehicle market remains the primary driver of global traction battery demand. Consumer interest in cleaner transportation, combined with government policies supporting vehicle electrification, is encouraging automakers to increase production of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). The International Energy Agency's Global EV Outlook 2024 reported that nearly 14 million new electric cars were registered worldwide in 2023, an increase of 35% year-on-year.
Strategic investments by automotive Original Equipment Manufacturers (OEMs) are also reshaping the traction battery manufacturing landscape. Automakers are forming joint ventures, expanding domestic production and vertically integrating battery operations to improve supply security and reduce dependence on third-party suppliers. In April 2024, Honda Motor Co., Ltd. announced plans to invest approximately CAD 15 billion in a comprehensive electric vehicle value chain in Canada. Public investment is supporting these initiatives, including more than $3 billion announced by the U.S. Department of Energy in 2024 for domestic production of advanced batteries and battery materials.
Market Challenges: Scarcity and price volatility involving lithium, cobalt and nickel remain major constraints on the Global Traction Battery Market. Growing electric vehicle production is intensifying competition for these materials, creating a supply-demand gap that can increase battery costs, reduce manufacturer margins and delay progress toward price parity with internal combustion engine vehicles.
The geographic concentration of battery cell manufacturing and mineral processing also exposes the industry to geopolitical disruption and supply interruptions. Data published by the Alliance for Automotive Innovation in 2024 indicates that China controls approximately 85% of global lithium-ion battery cell production and 65% of lithium refining. Manufacturers outside China consequently face ongoing risks related to material availability, pricing and production schedules, increasing the importance of supply chain diversification and domestic processing capacity.
Market Trends: Lithium Iron Phosphate (LFP) battery chemistry is gaining market share as manufacturers prioritize affordability, thermal stability and longer cycle life for standard-range electric vehicles. LFP batteries reduce reliance on cobalt and nickel, making them increasingly attractive for entry-level, mid-market and commercial vehicle applications. The China Automotive Power Battery Industry Innovation Alliance reported that cumulative LFP battery installations in China reached 409.0 GWh in 2024, accounting for 74.6% of total installed capacity.
Solid-State Battery technology is also progressing from laboratory development toward pre-production and commercialization. These next-generation batteries are expected to support higher energy density, improved safety, faster charging and longer driving ranges. Initial adoption is likely to focus on premium vehicles because of higher production costs. In March 2024, Samsung SDI announced plans to begin mass production of all-solid-state batteries by 2027, targeting an energy density of 900 watt-hours per liter.
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Report Scope: The Global Traction Battery Market report evaluates market size, growth drivers, challenges and emerging industry trends across product types, capacities, applications and regions.
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