After being tested in planes, helicopters, and container ships, battery power is now making its way to trains to replace diesel-fuelled generators that have powered locomotives for over a century. The total cost of ownership (TCO) of a battery electric train is significantly lower than that of a diesel-powered train. Switching to battery-powered electricity is likely to reduce greenhouse gas emissions while also improving local air quality. These battery-electric approaches promise a cleaner environment, lower rail fuel costs, and fewer premature deaths from air pollution.
The unexpected outbreak of the pandemic in 2020 dampened the market demand. As a result, there has been a significant drop in demand for batteries across industries. Furthermore, the ongoing supply chain crisis is elevating the industry's challenges. The current battery production in the USA is struggling to keep up with the rising demand. In addition to the lack of manufacturing of li-ion batteries in North America, there is also a shortage of cathode and anode materials, for which the USA is entirely dependent on producers overseas.
The crisis in the battery supply chain paired with the travel restrictions caused major revenue losses to industry stakeholders in the first year of the pandemic (a notable decline of 3.0% in 2019-2020). However, the industry has been gradually rebounding from the year 2021. The growth in the adoption of autonomous and high-speed railways is creating ample opportunities for both lead-acid and lithium-ion batteries. Furthermore, ardent efforts are being made toward the conversion of diesel trains to battery electric trains to create a cleaner environment and lower fuel costs for railways. Overall, the railway battery market is likely to rebound at a modest CAGR of 2.4% in the long run to reach US$ 0.5 Billion in 2027.
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