Redflow and recent sales, page-16

We need to manage our expectations regarding sales over the next 6-12 months. With the Gen 3 entering customer trials, we should expect sales of the Gen 2.5 to drop. In economics the demand for a product decreases when there is an expectation that the product (or a substitute of the product) will reduce in price in the foreseeable future. And with the Gen 3 battery being released in the next 6-12 months, there is a clear expectation for a price drop of at least 30%. So our customers are taking note of this, they are not fools. Who would buy a Gen 2.5 battery today at full price when the Gen 3 battery will be available for 30% less ? The investment horizon for a product like this is 10 years or more, so a 30% price drop makes a massive difference to the buiness case, and which is the whole point of the Gen 3. Our target market are sophisticated customers who have a long term outlook so I would be surprised to see any big sales announcements in the next 6-12 months as customers await the Gen 3.What Redflow needs to do is provide regular updates about the Gen 3 testing to satisfy investor demand for news and information.