Traction inverter, as a critical component in electrified transportation, has been the subject of many research projects in terms of topologies, modulation, and control schemes. Recently, some of the well-known electric vehicle manufacturers have utilized higher-voltage batteries to benefit from lower current, higher power density, and faster charging times. With the ongoing trend toward higher DC-link voltage in electric vehicles, some multilevel structures have been investigated as a feasible and efficient option for replacing the two-level inverters. Higher efficiency, higher power density, better waveform quality, and inherent fault-tolerance are the foremost advantages of multilevel inverters which make them an attractive solution for this application. This paper presents an investigation of the advantages and disadvantages of higher DC-link voltage in traction inverters, as well as a review of the recent research on multilevel inverter topologies for electrified transportation applications. A comparison of multilevel inverters with their two-level counterpart is conducted in terms of efficiency, cost, power density, power quality, reliability, and fault tolerance. Additionally, a comprehensive comparison of different topologies of multilevel inverters is conducted based on the most important criteria in transportation electrification. Future trends and possible research areas are also discussed.