Deep dive: Battery chemistry & next-gen storage materials — the fastest-moving subsegments to watch

Global investment in next-generation battery chemistries reached $47.3 billion in 2025, up 62% from $29.2 billion in 2023, according to BloombergNEF's annual energy storage investment tracker. Behind that headline figure, capital is concentrating in a handful of subsegments that are moving from laboratory curiosity to commercial reality at unprecedented speed. For procurement leaders sourcing energy storage systems across emerging markets in Asia, Africa, and Latin America, understanding which chemistries are scaling, which remain speculative, and which are approaching cost crossover points is essential for making purchasing decisions that will hold up over 10 to 20 year asset lifetimes.

Why It Matters

The energy storage market is undergoing a chemistry diversification that has no precedent since the commercialization of lithium-ion in 1991. Lithium iron phosphate (LFP) cells now account for 40% of global battery shipments by capacity, up from 18% in 2020, driven by Chinese manufacturers who have pushed pack-level costs below $60 per kWh (BNEF, 2025). But LFP is not the end of the story. Grid-scale storage deployments are growing at 45% compound annual growth rates globally, creating demand for chemistries optimized for duration, cycle life, safety, and cost profiles that lithium-ion cannot economically address.

Emerging markets face particular urgency. India's National Energy Storage Mission targets 50 GWh of grid-scale storage by 2030. Brazil's electricity regulator ANEEL approved 15 GW of battery storage interconnection requests in 2025 alone. Indonesia, Vietnam, and the Philippines are all developing storage mandates tied to renewable energy integration requirements. Procurement teams in these markets must navigate a landscape where chemistry selection directly determines project economics, supply chain risk, and operational performance for decades.

The subsegments moving fastest are not necessarily the ones attracting the most headlines. Sodium-ion batteries, iron-air systems, solid-state architectures, and advanced LFP variants each occupy different positions on the readiness curve, and each presents distinct procurement implications.

Key Concepts

Battery chemistry subsegments can be evaluated along four dimensions relevant to procurement: energy density (Wh/kg and Wh/L), cycle life (number of charge-discharge cycles to 80% capacity retention), round-trip efficiency (percentage of energy recovered versus stored), and levelized cost of storage (LCOS, measured in dollars per MWh-cycle). Different applications prioritize these dimensions differently. Electric vehicle batteries favor energy density. Grid-scale storage favors cycle life and LCOS. Behind-the-meter commercial storage seeks balance across all four.

The technology readiness level (TRL) framework, adapted from NASA's original scale, provides a common language for assessing subsegment maturity. TRL 1 through 3 represents basic research and proof of concept. TRL 4 through 6 covers prototype development and pilot-scale validation. TRL 7 through 9 indicates system demonstration and commercial deployment. The fastest-moving subsegments are those crossing from TRL 6 to TRL 7, where pilot production transitions to volume manufacturing.

What's Working

Sodium-Ion Batteries: From Laboratory to Gigafactory

Sodium-ion (Na-ion) batteries have made the most dramatic transition of any next-gen chemistry, moving from TRL 5 to commercial production in under three years. CATL began mass production of its first-generation Na-ion cells in 2023, and by late 2025 the company had shipped over 8 GWh of Na-ion capacity, primarily for two-wheeled vehicles and stationary storage in China (CATL, 2025). HiNa Technology, a spin-off from the Chinese Academy of Sciences, commissioned a 5 GWh Na-ion production line in Shanxi province in early 2025. BYD announced a 30 GWh Na-ion gigafactory targeting completion in 2027.

For emerging market procurement, Na-ion is compelling because it eliminates lithium and cobalt from the supply chain entirely. Sodium is extracted from common salt and is available virtually everywhere. Cell-level costs for Na-ion have reached $45 to $55 per kWh, and industry projections target $30 to $35 per kWh at scale by 2028 (Wood Mackenzie, 2025). The chemistry offers 2,000 to 4,000 cycle life at 80% depth of discharge, adequate for grid storage applications with 10 to 15 year operational horizons.

India's Reliance Industries announced a 10 GWh Na-ion manufacturing facility in Gujarat in 2025, explicitly targeting domestic grid storage demand. Indonesia's state utility PLN signed a memorandum of understanding with CATL for Na-ion deployments at solar-plus-storage projects across Java and Sumatra. These deals signal that Na-ion is moving from a China-centric supply chain to a globally distributed one.

Iron-Air Batteries: Ultra-Low-Cost Long-Duration Storage

Iron-air batteries, which store energy by reversibly rusting and de-rusting iron, represent the most promising pathway to storage durations of 100 hours or more at costs below $20 per kWh. Form Energy, the Massachusetts-based startup backed by $800 million in venture and project financing, began construction of its first commercial-scale manufacturing facility in Weirton, West Virginia, in 2023. The plant is designed to produce 500 MW of iron-air battery capacity annually, with first deliveries scheduled for late 2026 (Form Energy, 2025).

Great River Energy in Minnesota commissioned a 1.5 MW / 150 MWh iron-air pilot system in 2025, the first utility-scale deployment of the technology. Early operational data showed round-trip efficiency of 45%, below the 50% target, but the system demonstrated 100-hour discharge capability during a simulated polar vortex event, confirming the core value proposition for multi-day energy security (Great River Energy, 2025).

For emerging markets with seasonal renewable variability, iron-air's low materials cost is transformative. The primary input is iron pellets, available globally at $80 to $120 per ton versus $10,000 to $25,000 per ton for battery-grade lithium carbonate. Xcel Energy, Southern Company, and Georgia Power have all signed offtake agreements with Form Energy, collectively representing over 15 GWh of committed capacity. Procurement teams evaluating long-duration storage should note that iron-air's lower efficiency is offset by its dramatically lower capital cost for applications where daily cycling is not required.

Solid-State Batteries: The EV Premium Segment Breakthrough

Solid-state batteries, which replace the liquid electrolyte in conventional lithium-ion cells with a solid ceramic, glass, or polymer electrolyte, promise 50 to 100% higher energy density, faster charging, and elimination of thermal runaway risk. Toyota announced in 2025 that it would begin limited production of solid-state cells for its Lexus EV lineup in 2027, targeting 1,000 km range and 10-minute charging to 80% state of charge (Toyota, 2025). Samsung SDI demonstrated a solid-state prototype with 900 Wh/L volumetric energy density, approximately double that of current NMC cells.

QuantumScape, which has raised over $2 billion since its founding, began shipping A-sample solid-state cells to automotive OEM partners in late 2025 for integration testing. The company's lithium-metal anode cells achieved 800 charge cycles with less than 10% capacity fade in controlled testing, though automotive qualification requires demonstration at the 1,500 to 2,000 cycle level (QuantumScape, 2025).

For procurement in emerging markets, solid-state batteries remain 3 to 5 years from price parity with conventional lithium-ion. Current prototype costs exceed $250 per kWh at the cell level, well above the $80 to $100 per kWh for NMC 811 and $50 to $60 per kWh for LFP. However, procurement teams sourcing for premium EV applications or safety-critical installations such as aviation and marine should begin qualification processes now, as supply allocation for early production volumes will be constrained.

What's Not Working

Lithium-Sulfur: Persistent Cycle Life Challenges

Lithium-sulfur (Li-S) batteries have attracted attention for their theoretical energy density of 2,600 Wh/kg, roughly five times that of current lithium-ion. In practice, the polysulfide shuttle effect causes rapid capacity degradation, and no manufacturer has demonstrated more than 500 cycles at commercially relevant loading levels. Oxis Energy, a UK-based Li-S developer, entered administration in 2021 after failing to achieve cycle life targets. Lyten, a San Jose startup, has shipped Li-S cells for niche defense applications but has not announced plans for grid-scale or mainstream EV production. Until the fundamental degradation mechanism is solved, Li-S remains a TRL 4 to 5 technology unsuitable for procurement planning.

Zinc-Bromine Flow Batteries: Operational Complexity Barriers

Zinc-bromine flow batteries offer theoretical advantages for grid storage, including decoupled energy and power scaling, but operational challenges have limited adoption. Bromine is a toxic, corrosive liquid requiring specialized handling and containment. Redflow, the Australian manufacturer, reported persistent issues with zinc dendrite formation causing short circuits and requiring manual maintenance interventions every 200 to 300 cycles (Redflow, 2025). Eos Energy, which pivoted from zinc-air to zinc-bromine chemistry, has struggled to scale production and reported manufacturing yields below 70% through 2025. For emerging market deployments where specialized maintenance staff may be limited, zinc-bromine presents operational risks that procurement teams should weight heavily.

Aqueous Organic Flow Batteries: Cost Reduction Stalled

Aqueous organic flow batteries using quinone-based electrolytes were projected to achieve electrolyte costs below $5 per kWh by 2025. Actual costs remain at $30 to $50 per kWh due to challenges in synthesizing and purifying organic molecules at scale. Green Energy Storage in Italy and Quino Energy in Germany have both delayed commercial launch timelines by 18 to 24 months. The chemistry shows promise for long-duration applications but is not yet ready for procurement at scale.

Key Players

Established Companies

CATL: World's largest battery manufacturer, leading Na-ion commercialization with 8 GWh shipped by late 2025 and 100 GWh of planned Na-ion capacity by 2028.

BYD: Vertically integrated EV and battery producer, investing $4.2 billion in next-gen chemistry R&D including Na-ion and solid-state programs.

Samsung SDI: South Korean manufacturer demonstrating solid-state prototypes with 900 Wh/L density, targeting automotive OEM qualification by 2027.

Toyota: Automotive OEM with the largest solid-state battery patent portfolio globally, planning limited production for Lexus EVs in 2027.

Startups

Form Energy: Iron-air battery developer with $800 million raised, constructing first commercial factory in West Virginia with 500 MW annual capacity.

QuantumScape: Solid-state battery developer with lithium-metal anode technology, shipping A-sample cells to automotive partners for qualification.

HiNa Technology: Chinese Na-ion specialist with 5 GWh production capacity, focused on stationary storage and low-speed EV applications.

Natron Energy: Sodium-ion developer using Prussian blue electrode chemistry, targeting data center UPS and industrial applications with 50,000-cycle life.

Investors

Breakthrough Energy Ventures: Bill Gates-backed fund with investments in Form Energy, QuantumScape, and multiple next-gen chemistry startups.

Temasek Holdings: Singapore sovereign wealth fund actively investing in battery supply chains across Southeast Asia, including Na-ion manufacturing.

LGES Ventures: LG Energy Solution's venture arm investing in solid-state electrolyte and advanced cathode material companies.

Subsegment Readiness and Procurement Timeline

Subsegment	TRL (2026)	Cell Cost ($/kWh)	Cycle Life	Procurement Ready	Key Risk
Sodium-Ion	8-9	$45-55	2,000-4,000	Now	Energy density limits
Iron-Air	7	$20-30 (projected)	3,000+	2027-2028	Efficiency (45-50%)
Solid-State	6-7	$250+	800-1,500	2028-2030	Manufacturing scale
Advanced LFP	9	$50-60	6,000-10,000	Now	Lithium supply chain
Lithium-Sulfur	4-5	N/A	<500	2030+	Cycle life degradation
Zinc-Bromine	6-7	$150-200	200-300*	Not recommended	Operational complexity

*Cycles between maintenance interventions

Action Checklist

• Evaluate sodium-ion batteries for grid-scale storage projects in regions with limited lithium supply chain access, requesting samples from CATL, HiNa, and Natron Energy for qualification testing
• For long-duration storage requirements exceeding 8 hours, engage with Form Energy to secure early delivery positions and begin site preparation for iron-air deployments
• Develop chemistry-agnostic procurement specifications that evaluate total cost of ownership (LCOS) rather than upfront cell cost, capturing cycle life and efficiency differences
• Establish testing partnerships with national laboratories or universities to independently validate manufacturer cycle life claims under local operating conditions (temperature, humidity, grid quality)
• Build procurement frameworks that allow chemistry substitution at the system integrator level, avoiding lock-in to single chemistries that may be superseded within 5 to 7 years
• Monitor solid-state battery automotive OEM qualification timelines for potential spillover into stationary storage applications by 2029 to 2030
• Assess local manufacturing incentives and import duty structures for emerging battery chemistries, as several emerging market governments are offering preferential treatment for non-lithium technologies

FAQ

Q: Should procurement teams in emerging markets wait for sodium-ion to mature further or buy LFP now? A: For projects with 2026 to 2027 commissioning dates, LFP remains the lower-risk choice with established supply chains, proven performance data, and competitive pricing at $50 to $60 per kWh. For projects commissioning in 2028 or later, Na-ion should be evaluated as a primary option, particularly in regions without domestic lithium processing. The optimal strategy for many procurement teams is to run parallel qualification tracks: deploy LFP for immediate needs while qualifying Na-ion for future procurements. CATL and HiNa both offer pilot-scale Na-ion systems (100 kWh to 1 MWh) suitable for on-site qualification at relatively low cost.

Q: How do iron-air batteries compare to vanadium redox flow batteries for long-duration storage? A: Both target durations of 8 hours and beyond, but they differ fundamentally in cost structure and operational profile. Vanadium redox flow batteries (VRFBs) achieve 70 to 75% round-trip efficiency versus 45 to 50% for iron-air, but vanadium pentoxide feedstock costs $15 to $25 per kg, making VRFB electrolyte expensive at $80 to $120 per kWh of capacity. Iron-air uses iron pellets at less than $1 per kWh of active material cost. For applications requiring daily cycling (peak shaving, renewable time-shifting), VRFBs' higher efficiency advantage is meaningful. For multi-day resilience applications (grid backup, seasonal storage), iron-air's dramatically lower LCOS makes it the stronger choice despite efficiency losses.

Q: What supply chain risks should procurement teams consider when sourcing next-gen battery chemistries? A: The primary risks vary by chemistry. For Na-ion, the supply chain is currently concentrated in China (over 90% of production capacity), creating geopolitical risk for non-Chinese buyers. For solid-state, manufacturing processes are not yet standardized, meaning early adopters face technology risk if their selected approach does not achieve scale. For iron-air, Form Energy is effectively the sole commercial supplier, creating single-source risk. Procurement teams should mitigate these risks by diversifying across chemistries for different application tiers, negotiating take-or-pay agreements that provide supply security without excessive volume commitment, and monitoring secondary suppliers who are 12 to 24 months behind market leaders.

Q: Are there emerging chemistries beyond these subsegments that procurement teams should track? A: Three chemistries merit monitoring: manganese-rich cathode materials (LMFP, lithium manganese iron phosphate) that offer 15 to 20% higher energy density than LFP at modest cost premium, with CATL and Gotion High-tech both ramping production; calcium-ion batteries being researched at Stanford and multiple Chinese universities as a potential post-sodium alternative; and organic radical batteries using polymer-based electrodes that could enable fully recyclable, non-toxic storage systems. None of these are procurement-ready before 2029, but tracking their progress informs long-term capital planning.

Sources

• BloombergNEF. (2025). Global Energy Storage Investment Tracker: 2025 Annual Review. London: BNEF.
• CATL. (2025). Sodium-Ion Battery Product Line: Commercial Deployment Report. Ningde, China: Contemporary Amperex Technology Co., Limited.
• Form Energy. (2025). Iron-Air Battery System: Technology Overview and Manufacturing Update. Somerville, MA: Form Energy Inc.
• Great River Energy. (2025). Long-Duration Energy Storage Pilot: First-Year Operational Performance Report. Maple Grove, MN: Great River Energy.
• QuantumScape. (2025). Solid-State Battery Development Update: A-Sample Qualification Results. San Jose, CA: QuantumScape Corporation.
• Toyota Motor Corporation. (2025). Solid-State Battery Development Roadmap and Production Timeline. Toyota City, Japan: Toyota Motor Corporation.
• Wood Mackenzie. (2025). Sodium-Ion Battery Market Outlook: Cost Trajectories and Deployment Forecasts to 2030. Edinburgh: Wood Mackenzie Ltd.
• Redflow Limited. (2025). Zinc-Bromine Battery System: Annual Performance and Maintenance Report. Brisbane, Australia: Redflow Limited.