Redflow sold 10-year warranties on batteries that died in months — then ran out of money

Redflow, a 19-year-old Queensland maker of zinc-bromine flow batteries, was one of the bright lights of Australian clean-energy manufacturing: multi-million-dollar contracts in California, customers including the Bureau of Meteorology, Optus and generator Stanwell, and a tip for 'Future Made in Australia' funding. On 23 August 2024 it went into voluntary administration, blaming tight capital markets and a failed raise to expand for its new US orders. Even staff said there was no hint of financial strife; the administrator found no buyer, and the assets went to liquidation.

The underlying problem was the product. Batteries sold with 10-year warranties failed within months to a few years. A Melbourne council's 36 ZBM2 batteries, installed in 2019, hit a 90 per cent failure rate; customers with $30,000–$60,000 home systems watched them die within months; a South Australian resort had 56 ZBM3s replaced within a year. Former staff said the final ZBM3 design was the least reliable of all. In its last full financial year, warranty costs rose by $2.7 million while sales revenue fell to $629,000 — Redflow spent more replacing batteries than it earned selling them.

Manufacturing was the root cause. Redflow made the world's smallest commercially available zinc-bromine flow battery, a design so unique there was no manufacturing manual, and its small volumes forced it onto repurposed third-party components — one part required Japanese beverage company Asahi to shut a production line for a week to make a year's worth. Simon Hackett, the former CEO and largest investor, described a 'conga line' of manufacturing problems: each fix was followed by a new failure, the failures scared off investors, and without investors the problems could never be fixed.

It shipped products under a 10-year warranty the batteries could not plausibly meet, so every sale booked revenue but created a larger future repair liability.

It was caught in a chicken-and-egg trap: reliable manufacturing needed standard components, standard components needed volume, and volume needed the reliability it never had.

It never turned a profit in nearly two decades and survived on repeated capital injections; when the failures kept surfacing, 'investor fatigue' set in and the money stopped.

It could not capitalise on its breakthrough: with a full US order book from the Inflation Reduction Act boom, administrators still blamed 'its inability to raise the necessary funding'.

A warranty is a balance-sheet promise: selling a product you cannot yet build reliably turns every sale into a liability that compounds just when you need investors to believe.

The assets went to liquidation after no buyer was found. About 124 unsecured creditors, including customers, were told to expect 19 cents in the dollar. Customers were left with dead batteries and worthless warranties after remote maintenance was switched off and annual electrolyte servicing stopped — the same batteries back phone towers in Australia, New Zealand and South Africa and weather radars. Simon Hackett wrote off his $11 million investment ('a very bloody expensive cookie'), and outgoing CEO Tim Harris said the industry needed 'significant and patient capital'.