RFX (ASX) AGM Friday 25 November Brisbane

Originally posted by SkyDi ↑

What is the plan for staying competitive against the Tesla Powerwall 2 offering, if it ends up being as per promised price & specifications when available. For instance, drop in Z-Cell price and/or higher storage capacities in upcoming models?

The next thing here; how do you stay competitive against the Tesla Powerall 2 offering effectively, and the answer is by being better than it; not by being cheaper than it. It’s not to say we don’t want to keep chasing down the cost curve, but we will sell that battery - we are selling that battery - to people who think this is a better mouse trap, it’s not really a copy of the same one. Again, it’s really important for us and for you to understand, we only succeed if there is a market in the world for a battery that is better than litium, not cheaper than lithium. That’s it; and I do believe that we can do that. I do expect Tesla to sell an awful lot of Powerwalls and I want them to sell an awful lot of Powerwalls, because that makes energy storage in homes a legitimate market. I used to run a business called Internode that was a tiny minnow working in the sea of an enormous company called Telstra, curiously another short name starting with T. The way you succeed against the larger competitor is you zig when they zag. You don’t copy them. You do something they can’t do, and you be loud and proud about it. That’s what drives me, in terms of making that succeed, and yes it needs to be a bit cheaper too - to support it.

How do LSBs stack up against the competition? If good price / performance, just one or a number of large sales into the booming company / mining / solar-farm / grid-scale etc projects could be a company-maker, and ultimately far bigger than the residential market. What are the perceived prospects for landing some large deals (worldwide + Australia)?

How do the LSBs stack up against the competition? …interesting point. They stack up very well in terms of resiliency – they are more extensive than their…. We are having some great conversations with the … you mentioned like mining companies and similar things. A number of our integrators are working avidly with mining companies and with resource companies - putting our batteries into mining and resource environements, where their hardiness is an extreme attribute and I do think we’ve got a good chance of succeeding in those places where the business sites are remote, paying more money for batteries is acceptable because what you get is a reliable result in a remote place that you won’t have to go back and keep changing out. So, there are attributes about long-life and low maintenability that means you can charge more money for it. So, I think there is a lot to be gained out of that.

What's with the warranty issue re "3 year all other parts", as the Solarquotes comparison table website has just picked up on, that is totally trashing the 'cost per warranted kWh' metric? This used to be a key difference for Redflow vs the rest; now it appears the opposite. Needs to be sorted out ASAP. (ps to make matters worse, they've just added the Powerwall 2 to the table, in the first column ... ouch!).

Next thing here is… there is a question here about warranty. One of the things we struggle with a little bit in the eyes of some people on hotcopper… is what is our warranty and how does it work. We’ve had a shot at clarifying that. The warranty now is that, it’s 10 years on the stack – which is the expensive, complicated high-intellectual property piece on the top; and there’s 3 years today on the balance of system – which means everything under that stack. So the tanks – which is difficult to see how anything’s going to happen to that; and frankly the pumps and the electronics box on the end – both of which are replaceable… (you’ve got to be a little bit careful of replacing the pumps – you tip the battery up to do it… tip it on its edge). Electronics is like any electronics – it might fail in the course of 10 years but you just replace it and it’s not particularly expensive. So think about it as, the engine core that runs the thing here, the set of bits around it … we obviously intend for those things to last 10 years as well but the electronics doesn’t, it won’t be expensive to swap it out and it doesn’t actually impact the rest of the battery which is the expensive bit. The analogy in my brain here is about the way some car companies sell cars where you’ve got a drive-by warranty and you’ve got a warranty on the rest of the car. So, if the windows fall off you replace them, but if the engine blows up we’ll give you a new engine, we warranted that for a much longer period. That’s why we’ve structured it at the moment. Again, for us, this is experiential. We don’t get a ‘10-year on everything’ battery by just saying here... we need to understand our own product and its own function in the market… we can make sure the thing is achieving longevity you want and we fully expect then to upwardly revise that further. The base point again is the expensive bit’s got the 10 year warranty on it.

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Hi SkyDi,

Thanks so much for presenting my questions (as per the quote) and the detailed transcription of the answers, for these and also what appears to be the entire Q&A session based on the recording (until recordus-interuptus).

You're a dead-set legend. I've never seen anyone do such a detailed set of transcripts/ posts to cover an AGM before. A truly Herculean effort.

Amongst the many items you covered, there were a couple of items no one has mentioned in summary yet, as far as I'm aware.

Firstly:

The bit about the cost of an installed system being around $19K or so, and it appeared that Simon H interjected and pointed out that it included the solar ... is that correct?

If so, that would be major news / info correction on this site, as at the time of the original Z-cell announcement there was much debate, with the eventual conclusion being that the $19K estimate was for just the Z-cell & possibly an inverter only, which made it seem far more expensive than expected & versus Tesla etc. The figure is still bandied about on a regular basis assuming no solar. Are you able to confirm?

If so, that would effectively be massive news / correction of huge misconceptions (as far as I'm aware)

Secondly:

The answer regarding the warranty was quite disappointing IMO. They are coming at it from a techo point of view rather than consumer. Solarquotes have picked up on it (as had a reviewer months ago), and have just recently (last week) updated the battery comparison table, which has now more than tripled the cost per warranted KW figure (against 3 years vs 10) and turned one of the great features into a bugbear versus all other batteries in the table. I assume they hadn't realised that yet at the AGM, as they fobbed it off as HC bloggers worrying about it. It's a bigger problem being on the comparison table now, and a very visible problem they will have to sort out, even if they don't know it yet (again, IMO)

...

Sorry to end on a downer. I do agree with the focus on quality and getting it right for the long term, and there were plenty of positives amongst the many things that were said (and so well documented... thanks so much again)

Cheers,
TTH

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