Non-lithium batteries are financially fragile but strategically vital. Here’s how vanadium, zinc, and iron-based storage really stack up against lithium-ion.
Most of the green technology headlines still orbit around lithium-ion, but the money quietly tells a different story: billions are now chasing alternatives like vanadium flow, zinc, and iron-based batteries. Yet many of the companies building these chemistries are burning cash at a pace that would make most CFOs sweat.
This matters because grid-scale energy storage is the backbone of a decarbonised power system. If non-lithium batteries can’t stay solvent long enough to scale, we’ll lean even harder on lithium-ion, with all its supply chain, safety, and lifetime challenges. If they do survive, they’ll shape how quickly we can integrate renewables, stabilise data centres, and build smarter, greener cities.
In this article, I’ll break down whether lithium-ion battery alternatives are financially viable today, what the numbers actually say about three key players (Invinity, Eos, ESS), and how investors, developers, and sustainability leaders should think about these technologies as part of a broader green technology strategy.
Are lithium-ion alternatives financially viable right now?
Short answer: they’re strategically important, but financially fragile. Right now, most non-lithium battery players are loss-making, cash-hungry, and operating in a much smaller market than lithium-ion. But they’re also positioned in a segment the grid will absolutely need: long-duration energy storage (LDES).
Here’s the tension:
- Demand for clean, dispatchable power is rising sharply as solar, wind, and data centre loads grow.
- Lithium-ion is fantastic for 1–4 hour applications, but it’s not optimised for 8–12+ hours, daily deep cycling, or 20+ year asset lives.
- Flow batteries (vanadium, iron) and aqueous zinc systems are designed for long-duration, high-cycle, stationary storage.
Financially, though, the picture is rough:
- None of the three profiled companies — Invinity Energy Systems (vanadium flow), Eos Energy Enterprises (zinc), ESS Tech (iron flow) — is profitable.
- Operating margins are negative across the board.
- Capex and R&D spend are high relative to revenue because they’re still ramping manufacturing.
So if you’re asking, “Can I bet my entire storage strategy on non-lithium chemistries in 2025?” the honest answer is: no, not yet. But if you’re asking, “Are these chemistries strategically vital for a resilient, low-carbon grid?” my answer is absolutely yes.
How do non-lithium battery players actually make money today?
The reality is that most non-lithium companies are still in the build-out phase, not the cash-harvest phase. Revenue is growing from a low base, and the business models are more concentrated than those of large lithium-ion manufacturers.
Narrower markets, fewer revenue streams
Unlike giants that serve both EVs and stationary storage, these firms are almost pure-play energy storage system (ESS) providers:
- Over 80% of their revenue comes from grid or behind-the-meter storage projects.
- They don’t sell into EVs, consumer electronics, or other high-volume markets.
That makes them:
- Highly exposed to project cycles and developer sentiment.
- Vulnerable to delays in policy support, interconnection queues, or financing.
There are some diversification efforts:
- Invinity uses licensing and royalty models, partnering with manufacturers like Chinese firms to expand production without fully funding all the capex itself.
- This splits the economics: less direct margin per unit, but potentially more stable income and lower balance-sheet risk.
Revenue trends: growth with pain underneath
From the available data up to mid-2025:
- Eos Energy saw >240% year-on-year revenue growth in H1 2025, driven by increased production and shipments.
- Despite that, net losses widened from US$74.9 million (H1 2024) to US$207.8 million (H1 2025).
- Cost of goods sold at Eos was more than three times revenue, a clear sign that economies of scale and manufacturing yields are still immature.
- ESS Tech and Invinity both saw year-on-year revenue declines (about 4% and 84% respectively), but Invinity’s 2025 revenues are expected to be heavily weighted to the back half of the year as projects close.
This is a classic emerging hardware pattern: huge growth in bookings or backlog, bumpy recognition of revenue, very ugly P&Ls for several years.
For anyone in project development or corporate sustainability, the key question isn’t just growth — it’s reliability. Can these suppliers deliver on time and stand behind warranties for 10–20 years? That’s where cash flow and balance sheet strength matter more than hype.
Cash burn, capex, and the real financial risk
If you want to understand whether lithium-ion alternatives are viable, don’t just look at revenue. Look at cash.
High R&D and capex are non-negotiable
New chemistries require heavy R&D and expensive factory build-out. For these three:
- R&D spend has been high relative to revenue — for ESS Tech, it’s exceeded revenue every year since 2020.
- Average capex-to-revenue ratio for Invinity, Eos, and ESS in the last year was about 118%.
- For comparison, the top 10 lithium-ion storage suppliers sit closer to 17% capex-to-revenue.
That gap explains a lot of the financial stress. You can’t get competitive unit costs without scale, but to reach scale you must spend aggressively on plants, automation, and process engineering.
Cash burn: who’s closest to the edge?
Based on H1 2025 data:
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Eos Energy:
- Operating cash burn increased from about US$12.3 million/month (2024) to US$15.8 million/month in the first half of 2025.
- Ended H1 2025 with around US$153.9 million in cash, but that’s heavily funded by external financing.
- Secured a US Department of Energy loan (up to ~US$305 million) and over US$300 million from private capital.
- Carrying a concerning debt-to-equity ratio of around -1.63, signalling a capital structure that equity investors need to scrutinise carefully.
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ESS Tech:
- Has been more cautious on cash, cutting monthly burn by about 15% from 2024 to H1 2025.
- Still ended H1 2025 with only US$0.8 million in unrestricted cash — later boosted to US$7.2 million, which at the H1 burn rate implied a runway of barely 1–2 months.
- Low gross debt (under US$1 million) but reliant on ongoing equity financing structures.
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Invinity:
- Reduced monthly cash burn by about 7% from 2024 to H1 2025.
- Benefited from a £11 million UK government grant in 2023.
- Has no external debt reported as of May 2025 and appears the least leveraged of the three.
For project developers and investors, this translates to one blunt reality: counterparty risk is real. If a supplier fails mid-project or mid-warranty, the finance model for your storage asset can fall apart.
Where do non-lithium chemistries actually win?
Despite the financial stress, there are clear technical and strategic reasons why non-lithium batteries deserve a place in a green technology roadmap.
1. Long-duration energy storage (LDES)
LDES is where these chemistries shine, and where lithium-ion starts to strain.
Flow and zinc-based systems typically offer:
- 8–12+ hours of discharge more economically than stacking lithium-ion.
- High cycle life with minimal degradation, often suitable for daily deep cycling over 15–20+ years.
- Easier thermal management and lower fire risk, due to aqueous electrolytes and non-flammable materials.
Policy support is catching up:
- Both Invinity and Eos have benefited from UK LDES schemes, with Invinity winning multiple projects and Eos securing a roughly 5 GWh framework agreement with Frontier Power.
- In the US, incentives like the Investment Tax Credit (ITC) with domestic content bonuses support non-lithium supply chains that are more local than most lithium-ion imports.
2. Supply chain resilience and geopolitics
Lithium-ion — especially LFP — leans heavily on globalised supply chains, often concentrated in a few countries. In contrast:
- Zinc and iron are more widely available and less geopolitically sensitive.
- US-based players like Eos and ESS emphasise domestic sourcing, aligning with policy frameworks like OBBB rules and import tariffs.
For governments and utilities that care about energy security, this isn’t a side note. It’s a strategic driver.
3. Specific use cases: data centres, industrial loads, and grid support
In 2025, data centres — especially AI workloads — are putting intense pressure on grids. Non-lithium storage is a strong fit for:
- Data centres that need multi-hour backup and grid-interactive capabilities without the fire risk profile of large lithium-ion banks.
- Industrial customers who want behind-the-meter solutions optimised for long-duration arbitrage, peak shaving, and resilience.
- Transmission and distribution deferral projects where a 10–12 hour battery can replace or delay network upgrades.
ESS Tech in particular has positioned its iron flow technology around data centre and grid applications where safety, duration, and lifetime matter more than pure energy density.
How should investors and developers approach this space?
There’s a better way to approach non-lithium storage than simply “all in” or “avoid at all costs”. It starts with treating these technologies like infrastructure with venture-style risk.
For project developers and utilities
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Mix technologies by use case
Use lithium-ion where it’s unbeatable (fast response, short duration, high energy density), and deploy non-lithium for:- 6–12+ hour duration
- Extremely high cycling
- Sites where fire safety and lifetime are critical
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Interrogate supplier financials
Don’t just look at spec sheets. For any non-lithium supplier, ask:- What’s your cash runway at current burn rates?
- How is your capex funded — debt, equity, grants?
- What’s your track record of delivering multi-megawatt projects on time?
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Structure risk in contracts
Use tools like:- Parent or performance guarantees
- Step-in rights if the supplier fails
- Extended warranties backed by insurance rather than only by the manufacturer’s balance sheet
For investors and corporate sustainability leaders
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Treat this as a long-duration bet
These businesses won’t look pretty on a one-year P&L. But if you believe in a grid with 60–80% renewables, LDES is not optional. -
Focus on capital discipline
I’d prioritise companies that:- Show improving unit economics over time
- Have diversified funding (grants + equity + selective debt)
- Keep burn under control even during scale-up
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Integrate non-lithium into your broader green technology stack
These batteries don’t live in isolation. They work best when combined with:- AI-driven energy management systems
- Smart grid controls and demand flexibility
- Onsite renewables and EV infrastructure
This is where the wider Green Technology theme matters. AI can optimise when to charge, discharge, and how to extend asset life. Sophisticated forecasting lets LDES units capture value from multiple markets — capacity, ancillary services, arbitrage — turning a fragile business case into a robust one.
So, are lithium-ion alternatives a good bet for 2025 and beyond?
Non-lithium battery companies are, right now, financially fragile but strategically necessary. The market is smaller than lithium-ion, the balance sheets are weaker, and the path to profitability is tough. Among the three analysed, Invinity currently looks the healthiest, largely due to lower leverage and more cautious cash management.
At the same time, the direction of travel is clear:
- Long-duration energy storage demand is rising.
- Policy support in the US, UK, and elsewhere is strengthening.
- Data centres, grids, and cities need storage solutions that lithium-ion wasn’t designed for.
If you’re building a decarbonisation roadmap, you shouldn’t ignore non-lithium chemistries just because the income statements look ugly. You should understand the risks, price them correctly, and integrate these technologies where they create system-level value — especially when paired with AI-driven control and smart grid infrastructure.
The real question for the next five years isn’t whether lithium-ion or its alternatives will “win”. It’s how quickly we can build a storage ecosystem where multiple chemistries work together to support a flexible, low-carbon, and financially sustainable energy system.
If your organisation is planning large-scale renewables, data centre capacity, or smart city infrastructure, this is the moment to start building non-lithium storage into your models — not as a curiosity, but as a strategic pillar of your green technology portfolio.