Abstract Energy storage technologies have been gaining increasing attention as a way to help integrate variable and intermittent renewable energy sources into the grid. In this paper, a novel gravity energy storage system which features a linear electric machine-based hoisting mechanism is investigated. The storage system utilises the inherent ropeless operation of linear electric machines to vertically move multiple solid masses to store and discharge energy. The consequent-pole linear Vernier hybrid machine is chosen as the machine topology, and a multi-objective design optimisation is conducted. The optimisation results are then used to perform a cost analysis by means of a levelised cost of storage calculation. A sensitivity analysis is also done to investigate some of the assumptions made in the levelised cost of storage calculation that have no direct influence on the design of the linear electric machine. This study shows that the proposed storage system has a cost-competitive advantage when used in applications with high power and a high number of annual cycles. The paper also highlights the most important factors that affect the economic performance, clearly indicating where further improvements can be made to further increase the viability of the storage system.