BYD still chasing mask deal despite refunding California $247M

By Zhang Rui
0 Comment(s)Print E-mail, May 14, 2020
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A photo shows a BYD mask manufacturing workshop in China. [Photo courtesy of BYD]

Chinese electric vehicle maker BYD refunded the state of California with $247million due to a delayed mask deal, after its American subsidiary failed to deliver N95 masks to California with the necessary certification on time. 

The amount is half the down payment for the $1 billion deal that was signed on April 7. Under the contract, California would buy 300 million N95 masks and 100 million surgical masks at unit prices of $3.30 and $0.55 respectively within two months. 

The Governor's Office of Emergency Services struck the contract with BYD subsidiary Global Health Product Solutions LLC, requiring the subsidiary to obtain certification from the National Institute for Occupational Safety and Health (NIOSH) by April 30. In an amendment signed on May 6 to the agreement, the date was put off to May 31. 

However, according to the original contract, the company was obliged to return $247.5 million to the state for not meeting the original deadline. The amendment added that if the masks aren't certified by May 31, California can get the rest of the payment back in early June. 

A source from BYD's American headquarters revealed that the refund is just a small interlude, meaning that the deal is not canceled, and that they are still pushing for NIOSH certification. 

The source said that California was very happy with the quality of surgical masks which have been delivered. The state even added another order of 100 million surgical masks. BYD claim that they have not yet shipped any N95 masks to the state, so have incurred no loss. 

BYD's American subsidiary submitted certification documents to NIOSH as early as March. NIOSH even quickened the pace of its certification time which would normally take up to one year. The source said everything was moving fast and smoothly, and that top executives were communicating with NIOSH every week. 

The reason BYD did not meet the deadline is due to the fact that they didn't ready the necessary paper work. 

BYD is China's leading electric vehicle manufacturer. Its American headquarters are in Los Angeles where it mainly produces electric buses. It has started to make masks since the outbreak of the COVID-19 epidemic. 

Its mask products have already received China's domestic medical equipment certificates as well as certification from Australia, Canada and Japan, and approval from the Food and Drug Administration (FDA) of the United States. 

BYD claims that they can produce 5 million masks per day, and will increase that amount by 300,000 to 500,000. It is also able to build 5 to 10 mask making machines per day by using mostly self-made components. The company now claims to own the biggest mask production factory in the world.

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