Traction Battery Market Report 2026

The traction battery market size has grown rapidly in recent years. It will grow from $44.36 billion in 2025 to $49.22 billion in 2026 at a compound annual growth rate (CAGR) of 11%. The growth in the historic period can be attributed to expansion of electric vehicle production, declining costs of lithium-ion batteries, increased deployment of electric forklifts, growth of industrial electrification, improvements in battery manufacturing processes.

The traction battery market size is expected to see rapid growth in the next few years. It will grow to $74.04 billion in 2030 at a compound annual growth rate (CAGR) of 10.7%. The growth in the forecast period can be attributed to increasing investments in next-generation battery technologies, rising demand for long-range electric vehicles, expansion of recycling and second-life battery applications, growing focus on supply chain localization, increasing adoption of solid-state batteries. Major trends in the forecast period include increasing adoption of high-energy-density battery chemistries, rising demand for fast-charging capable batteries, growing integration of battery management systems, expansion of solid-state and sodium-ion technologies, enhanced focus on battery lifecycle optimization.

The growing demand for high-energy storage is expected to drive the expansion of the traction battery market in the coming years. High-energy storage refers to the ability of a system or device to store large amounts of energy within a compact or lightweight form. Traction batteries used in high-energy storage applications support grid energy storage, uninterruptible power supply systems, and enhanced vehicle-to-grid functionalities for electric vehicles. For example, in April 2024, according to the International Energy Agency, a France-based intergovernmental energy organization, global battery storage deployment in the power sector more than doubled year over year in 2023, with approximately 42 GW of new battery storage capacity added worldwide. This expansion increased total installed battery storage capacity to around 85 GW by the end of the year. Therefore, the rising demand for high-energy storage is driving the growth of the traction battery market.

Companies operating in the traction battery market are increasingly focused on advancing battery technologies, such as next-generation lithium-ion battery systems, to improve energy efficiency, charging speed, and durability. These next-generation lithium-ion batteries are advanced rechargeable energy storage solutions designed to offer higher energy density and enhanced electrochemical performance, enabling faster charging, better thermal stability, and longer service life. For instance, in January 2023, the U.S. Department of Energy launched the Electric Vehicles for American Low-Carbon Living (EVs4ALL) program, an advanced battery research initiative aimed at accelerating innovation in electric vehicle traction batteries. The program supports research into next-generation lithium-ion chemistries, fast-charging performance improvements, and enhanced operational resilience, helping to improve battery performance, cost competitiveness, and readiness for large-scale electric mobility adoption.

In February 2024, AB Volvo, a Sweden-based manufacturing and technology company, acquired the battery business of Proterra Inc. for USD 210 million. This acquisition is intended to accelerate Volvo’s battery-electric vehicle development strategy by incorporating Proterra’s specialized expertise in battery design, development, and assembly. Proterra Inc. is a US-based technology company that focuses on designing and manufacturing battery modules and packs for commercial electric vehicles.

Major companies operating in the traction battery market are Amara Raja Batteries Limited, BAE Batterien GmbH, Banner Batterien GmbH, BYD Company Limited, Coslight Technology International Group Co. Ltd., East Penn Manufacturing Company Inc., EnerSys, Exide Industries Limited, GS Yuasa International Ltd., HOPPECKE Carl Zoellner & Sohn GmbH, Mutlu Akü ve Malzemeleri Sanayi Ticaret A.S., Sunlight Systems S.A., C&D Technologies Inc., Chaowei Power Holdings Limited, Leoch International Technology Limited, Sebang Global Battery Co. Ltd., Tesla Inc., Panasonic Corporation, LG Chem Ltd., Samsung SDI Co. Ltd., Contemporary Amperex Technology Co. Limited (CATL), Saft Groupe S.A., Trojan Battery Company, A123 Systems LLC, Toshiba Corporation, Hitachi Chemical Co. Ltd., Narada Power Source Co. Ltd., NorthStar Battery Company LLC, Sumitomo Electric Industries Ltd., Crown Battery Manufacturing Company, Tadiran Batteries GmbH, Discover Battery, Sinopoly Battery Limited.

North America was the largest region in the traction battery market in 2025. The regions covered in the traction battery market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the traction battery market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The traction battery market consists of sales of volt battery, and monobloc battery. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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