RFX (ASX) Ann: Redflow Quarterly Update Q4 FY2021 and Appendix 4C

Originally posted by Docweemo: ↑

I don’t know if a larger battery would have saved them. I suspect not - still can’t see enough people buying it. My feeling is it took them 2 years to move the manufacturing to Thailand and iron out the quality issues - they sent 4 batteries to the test centre before they finally got one working stably. It just wasn’t fast enough - they’d probably have solved the problems at Flex in less time, and then been left with far greater capacity. Now they are not sufficiently competitive price-wise with lithium, where they need to be significantly cheaper to offset the lower RTE. Don’t think Gen3 will be enough with competitors like LIS listing this month with tech showing >500Wh/kg after 600 cycles and higher round trip efficiency; skeleton with $80M in back orders, Tesla sold out till end 2022, big car manufacturers bringing out solid state lithium in a few years at massive volumes, and RFX struggling for sales. The directors seem to have given up - not one of them took up their full allocation. So hard to see how this could turn around if none of the directors can see a profit in at least the medium term. Suspect that better director diversity may have found someone who could envisage a path to profitability and hard nosed enough to carve it out.
I’m a bit like you - been watching for years. Only i made the mistake of buying in for a while, lost most of it, and keep following out of interest. I probably would buy back in if the price drops far enough because I suspect there’ll be at least one more price spike when a surprisingly large order is received (and I do think at least one more is likely). But they need multiple megawatt installations per month to be viable, and I don’t think that is likely. I’d like to see the tech succeed, so hope to be proved wrong.

Expand

A lot of the posts here seem focussed on the head-to-head price comparison with lithium batteries in general, and Tesla Powerwall in particular:
Which is cheaper to buy and install?
Which looks better?
Which has greater brand recognition?

Well lithium wins on each of these questions hands-down, and Tesla presently wins in the Lithium arena.

But... primarily in the residential, grid-connected application

So most of the posts looking at this question are missing the point that the grid-connected, residential market is almost completely irrelevant to Redflow. There may come a time when this market matters, but that time isn't yet. And by the time that market matters the cost equation is likely be quite different.

For the present Redflow is targeting a market where either lithium is not an option (e.g. mobile phone towers) or the dangers and associated mitigation costs of lithium are being exposed almost weekly (e.g. grid / utility scale). For these applications the customer barely cares what the unit looks like. They care about safety, compatibility, reliability, environmental requirements, maintenance costs, and total cost of ownership. I believe that Redflow is well-placed on all of these headings. They have a weakness in terms of track record, but every month that goes past without incident strengthens the argument in favour of the product.

I'm comfortable at the moment because Redflow has bagged for me once already, so perhaps my outlook is influenced by a substantial capital buffer. I have significant expectations for the next twelve months.