Non-lithium batteries look risky on paper—but they’re crucial for long-duration green energy storage. Here’s what the numbers say and when they actually make sense.
Most investors I talk to love the idea of “post-lithium” batteries—but hate the numbers when they open the latest quarterly report.
The tension is real. On one side, you’ve got a global energy transition, long-duration energy storage targets, data centres hungry for clean backup power, and governments throwing support behind green technology and domestic supply chains. On the other, you’ve got vanadium flow, zinc, and iron flow battery companies burning cash, missing scale, and fighting for a sliver of market share dominated by lithium-ion.
This matters because where capital flows now will shape the energy system of the 2030s. If you care about green technology, grid decarbonisation, or just want to put money behind something that isn’t another EV battery factory, you need a clear-eyed view: are non-lithium battery companies financially viable, or just a noble science experiment?
Here’s what the latest data from Invinity Energy Systems (vanadium flow), Eos Energy Enterprises (zinc), and ESS Tech (iron flow) really tells us—and how to use that insight if you’re investing, developing projects, or building strategy in clean energy.
1. The core question: are lithium-ion alternatives financially viable?
The short answer: not yet on a pure financial basis, but they’re getting closer—and policy plus market design may tip the scales.
Lithium-ion dominates energy storage because it’s been pulled up by the EV market. Scale has crushed cell costs, and developers know how to finance, integrate, and operate lithium projects. Alternative chemistries don’t have those advantages:
- They serve niche but growing segments like long-duration energy storage (LDES) rather than mass EV markets.
- Their addressable market is much smaller today, so fixed costs are spread over fewer MWh.
- They’re still in manufacturing ramp-up, with high R&D and capex and no operating profit.
Yet, from a green technology and grid-planning perspective, these chemistries solve problems lithium-ion doesn’t handle well:
- Safer, non-flammable technologies for dense urban or critical infrastructure sites.
- Long-duration storage (8–12+ hours) at potentially lower lifetime cost.
- Domestic, geopolitically resilient supply chains using abundant materials like iron or zinc.
The financial story is messy, but the strategic story is strong, and that’s exactly where smart investors and developers should be paying attention.
2. Revenue reality: growth, concentration, and risk
These companies are growing in fits and starts but remain small, loss-making, and dependent on a single narrow market: grid-scale energy storage.
What the revenue numbers say
From the latest reported periods:
- Eos Energy saw H1 2025 revenue grow over 240% year-on-year, driven by higher production and shipments of its zinc-based Energy Block solutions.
- ESS Tech and Invinity both saw revenue declines year-on-year (around 4% for ESS, ~84% for Invinity).
- None of the three has generated operating profit yet.
There’s a key structural weakness here:
Over 80% of revenue for these companies comes from energy storage systems, not diversified battery markets like EVs or consumer electronics.
Lithium-ion giants can spread risk across EV, grid storage, consumer devices, and industrial segments. Alternative chemistry players are largely single-market dependent. When project timelines slip or policy support is delayed, revenue volatility hits hard.
Niche chemistries, niche markets (for now)
Because vanadium flow, zinc, and iron flow batteries are still emerging technologies:
- The end market is much smaller than lithium-ion.
- Developers and financiers are conservative and lean toward proven chemistries.
- There’s an educational gap—many buyers still default to “just use lithium” even when lifecycle economics favour long-duration technologies.
One interesting exception is Invinity, which is starting to license its technology (for example, in China) to create royalty-based revenue. That’s smart. Licensing can:
- Reduce capital intensity.
- Expand the manufacturing footprint without heavy capex.
- Build a global ecosystem around the chemistry.
For investors, revenue concentration is the biggest immediate red flag. For project developers, it means counterparty risk is very real—you’re often dealing with smaller, less diversified suppliers.
3. Cash burn, capex, and the brutal path to scale
The reality of scaling non-lithium batteries is this: you need to spend like a hardware company before you earn like a software company.
R&D and capex: high by design
These companies are doing hard tech in a capital-intensive space. The numbers reflect that:
- R&D spending at Eos and ESS has exceeded revenue most years since 2020. For ESS Tech, R&D has been higher than revenue every year from 2020 to at least mid-2025.
- Average capex-to-revenue ratio for Invinity, Eos, and ESS in 2024 was around 118%, versus roughly 17% for the top 10 global energy storage suppliers.
That’s what early-stage manufacturing looks like. You’re building:
- Production lines
- Quality systems
- Manufacturing processes
- Field support capabilities
…before you have volume to amortise all of it.
Cash flow and liquidity risk
Operating cash flow is where things get uncomfortable:
- Eos Energy saw operating cash burn rise from US$12.3 million/month in 2024 to US$15.83 million/month in H1 2025.
- ESS Tech did manage to cut its monthly burn by about 15% from 2024 to H1 2025, but still ended H1 2025 with only US$0.8 million in unrestricted cash. After new funding lifted that to US$7.2 million, it still had a runway of roughly 1.4 months at its then-current burn rate.
- Invinity reduced its burn by about 7%, supported by a £11 million UK government grant in 2023 and no external debt as of May 2025.
Free cash flow is negative across the board, as you’d expect at this stage—but the combination of long project cycles, lumpy revenue, and aggressive capex means liquidity is a constant concern.
From an investment lens, you’re betting on:
- Execution (they actually hit cost and volume targets), and
- Survivability (they don’t run out of cash before they get there).
From a project developer’s perspective, this is why credit risk checks and performance guarantees matter more than ever for non-lithium technologies.
4. Balance sheets, debt, and the policy safety net
Financial viability isn’t just about revenue and margins. It’s about how long these companies can keep playing the game.
Debt and equity – who’s exposed to what?
You see two very different approaches among the three firms:
-
Eos Energy is heavily reliant on external financing.
- End of H1 2025 cash: about US$153.9 million, supported by multiple financing rounds.
- A US Department of Energy loan of up to US$305.3 million.
- Up to US$315.5 million in funding from a private equity firm in 2024.
- Q2 2025 reports show a debt-to-equity ratio of around -1.63, which is concerning and reflects significant balance sheet strain.
-
ESS Tech and Invinity are skewed far more toward equity financing.
- ESS had gross debt of under US$1 million in Q2 2025, plus new equity arrangements of up to US$65 million with investors.
- Invinity reported no external debt as of May 2025, which gives it more flexibility, even if its scale is smaller.
From a purist financial perspective, Invinity currently looks healthiest on the balance sheet side—even though its revenue base is modest.
Policy tailwinds for non-lithium energy storage
Here’s where the green technology and policy story intersects with finance.
Alternative chemistries plug neatly into several major policy priorities in the US and UK:
- Domestic supply chains: Eos and ESS emphasise US-based production and sourcing, aligning with:
- “Buy America” rules
- Tariffs on imported cells
- Domestic content bonuses under the Inflation Reduction Act (IRA)
- Long-duration energy storage (LDES): both the US and UK see LDES as essential for high-renewables grids.
- In the UK, LDES Cap and Floor schemes are already benefiting Invinity and Eos, with multi-GWh contracts and project selections.
- Rising data centre demand in the US is a major opportunity for ESS Tech’s iron flow technology that emphasises safety and duration.
Policy doesn’t magically fix a broken business model. But it buys time, reduces risk for offtakers, and can tilt project economics in favour of non-lithium options where duration or safety are critical.
5. How should investors and project developers approach these companies?
There’s a better way to think about non-lithium batteries than “lithium competitor” vs “lithium loser”. They’re not trying to win the same game; they’re targeting a different position in the grid.
For investors: how to frame the opportunity
If you’re evaluating these companies as part of a climate or green technology portfolio, treat them as high-risk, high-upside infrastructure enablers, not core holdings. Practical questions to ask:
-
Market fit
- Where is this chemistry clearly superior—8+ hour storage, safety-constrained sites, harsh environments?
- Are there signed contracts that prove someone is willing to pay for that advantage?
-
Unit economics path
- Do they have a credible roadmap to manufacturing cost reductions (licensing, automation, partnerships)?
- Are they leveraging policy and regional incentives intelligently?
-
Liquidity and dilution
- What’s the current cash runway at the latest burn rate?
- Are you likely buying into multiple rounds of dilution before profitability?
From what we see today, Invinity looks relatively de-risked on the balance sheet, Eos has the most aggressive scale-up but also the highest financial stress, and ESS sits between the two with modest debt but tight cash.
For developers and energy buyers: when to consider non-lithium
If you’re working on projects in the green technology or renewable energy space, non-lithium chemistries start making sense when:
- You need 8–12+ hours of storage and full-cycle lifetime cost beats stacking multiple lithium systems.
- Safety, non-flammability, and environmental profile are non-negotiable (e.g., data centres, urban substations, critical infrastructure).
- You value domestic content and resilient supply chains, especially in the US under IRA incentives.
To manage risk:
- Prioritise projects backed by strong policy or regulated returns (like the UK LDES cap-and-floor framework).
- Push for performance guarantees, warranties, and clearly defined O&M responsibilities.
- Look for suppliers with reference projects and credible service capability, not just a lab-proven technology.
6. Why this matters for the future of green technology
Most companies get this wrong. They assume lithium-ion is “good enough” forever and treat everything else as a curiosity.
Here’s the thing about decarbonising power systems: we don’t get to 80–90% renewables with one storage chemistry. We need:
- Fast-responding lithium systems for short duration and frequency control.
- Long-duration batteries (vanadium flow, iron flow, zinc, and others) to cover multi-hour to multi-day gaps.
- Flexible demand, interconnection, and maybe even seasonal storage like hydrogen.
Alternative battery chemistries are part of that stack. The economics look rough today because we’re still in the “build-the-tooling” phase, not the “run-the-tooling” phase. Lithium-ion had a 20-year head start, supercharged by trillions of dollars in the EV market. Non-lithium storage is trying to do in 5–10 years what lithium did in 20.
From a Green Technology lens, this is exactly the kind of sector that needs patient, climate-aligned capital and smart policy design. The companies highlighted—Invinity, Eos, ESS—might not all make it. Some will fail, some will merge, some will license their IP and pivot.
But the direction is right: safer, longer-duration, domestically sourced energy storage that can handle a grid dominated by wind, solar, and AI-loaded data centres.
If you’re building strategy for 2030 and beyond, your question shouldn’t be “lithium or non-lithium?”. It should be:
“Where in my portfolio does long-duration, lithium-free storage create value—and which technologies are close enough to bankable for me to start today?”
The companies we’ve discussed are your early signals. Watch their margins, their cash runway, and their project wins. As they cross the line from technology risk to scale risk, you’ll know it’s time to move from pilot curiosity to mainstream deployment.