Beware, startups looking to sell fuel cells to the forklift market – the battery makers are coming.

Kawasaki Heavy Industries Ltd. announced Tuesday that it will start manufacturing Gigacell bipolar nickel-metal-hydride batteries, originally aimed at electricity grid applications, for transportation markets - and it's testing those batteries in forklifts (hat tip to Green Car Congress).

Toshiba Corp. is also gunning for the market, announcing last month that it would build a $330 million plant to make faster-charging lithium-ion batteries to use in industrial applications including forklifts.

And Nissan Motor Co. and NEC Corp. said last month that they will invest at least $1.1 billion to manufacture lithium-ion batteries through Automotive Energy Supply Corp., a joint venture first announced in May. While the joint venture plans to make batteries for electric cars, it will first use the batteries in forklifts, the companies said.

That could pose tough competition for fuel-cell companies like Plug Power (NSDQ: PLUG), Hydrogenics Corp. and Oorja Protonics that are targeting the forklift market (see Plug Power Puts Fuel Cells in Forklifts and Greentech Innovations: Why Fuel Cells Finally Make Sense).

Forklift makers have been early adopters of emission-free propulsion, since the vehicles work in warehouses and other limited-range settings, making charging and refueling stations an easier proposition. Lots of forklifts now run on batteries, mainly the old-fashioned lead-acid kind.

Fuel-cell companies argue that their products offer advantages over batteries, such as cutting down refueling time to minutes, rather than the hours that it can take to recharge batteries.

But that raises questions about the fuel those fuel cells use. Plug Power and Hydrogenics use hydrogen, which today is made at commercial volumes by cracking methane, a process that yields nine kilograms of carbon dioxide for every kilogram of hydrogen.

Making hydrogen through electrolysis of water could offer a cleaner alternative, but would require massive investments by power plants that aren't set up to do it today. (Oorja Protonics sidesteps those issues by using methanol as a fuel instead of hydrogen.)

And the promise of new battery technologies that can offer faster recharging times could put a crimp in the advantage fuel-cell makers have in faster refueling speed. Toshiba, for its part, claims that its Super Charge ion Battery (SCiB) can charge to 90 percent capacity in less than five minutes.

On the other hand, charging batteries rapidly requires expensive high-powered chargers. When the time and cost factors are put together, the fuel cell companies may have an advantage. A methanol pump only costs a few thousand.

The fuel cell makers also say they will increase productivity and reduce real estate costs. Because even fancy batteries will have a limited range, companies will have to maintain battery charging bays and own two to three batteries for every forklift.

So expect a tempest in a warehouse.