Electric bus maker BYD shows China’s complications in Biden’s climate push, Auto News, ET Auto
Some 500 union workers assemble batteries, weld frames, and install seats, steering wheels and transport cases, creating zero-emission public transportation at a BYD North America factory the size of nine football fields.
Converting city buses to battery or fuel cell is considered one of the fastest ways to reduce greenhouse gas emissions from the transportation sector, which at 29% accounts for the largest share of U.S. emissions .
But BYD, a unit of BYD Co Ltd based in China, is not eligible for the billions of dollars that are expected to roll out of Washington in the coming months to electrify bus fleets, due to a 2019 law written with it in mind. the company.
BYD North America spokesman Frank Girardot said BYD will oppose the move because it does not receive state funding through its Chinese parent company. “Excluding us from the lucrative mass transit market is bad for the American consumer, taxpayer and worker,” Girardot said.
The elimination of one of the two main players in the electric bus industry, even with other rivals expected to increase production, means Biden will struggle to quickly electrify the country’s bus fleet, endangering an element key to the president’s climate program, transport warns experts.
“It’s very difficult with the current manufacturing infrastructure in this country, and with BYD in the process, to imagine getting this big fleet change anytime soon,” said Jeff Davis, senior researcher at the Eno Center for Transportation, who tracks the federal public transit funding and politics.
The ban also threatens one of the rare examples of unionized workers in the green economy, a mainstay of Biden’s economic agenda, and marks the latest test of strained relations between the US government and companies with ties to China.
A White House official expressed confidence in the country to increase production, saying that a combination of strong federal funding for zero-emission buses coupled with support for vehicle and battery manufacturers “would build capacity. national level sufficient to support an accelerated transition to electric buses ”.
Biden and a group of bipartisan lawmakers have agreed to spend an unprecedented $ 7.5 billion to replace some 50,000 diesel buses – or roughly 70 percent of the U.S. mass transit fleet – with electric buses over the years. next eight years, as the administration aims to cut U.S. emissions in half by 2030.
BYD North America competes primarily in the US electric bus market with California-based Proterra Inc. They have each sold approximately 1,000 electric buses in the United States to date. And Proterra plans to build a nationwide cell manufacturing plant over the next few years. For a FACTBOX of other players in the sector, click on
Other bus manufacturers are expected to help close the gap over time, including US company GILLIG, the New Flyer unit of Canadian group NFI and Novabus, a subsidiary of Volvo, based in Canada, according to Dan Raudebaugh. , executive director of the Center for Transportation and the Environment.
But they all lag behind BYD in terms of current electric bus production capacity.
GILLIG, NFI and Novabus are long-time diesel bus manufacturers who have started selling hybrid, electric and hydrogen versions of their models in recent years. Other companies, including Canadian companies Lion Electric Co and GreenPower Motor, US ENC REV Group Inc and UK Arrival, are also just starting to ramp up their transit operations.
“BUILD AMERICA” against China’s fears
Chinese companies have production capacity for a host of other eco-friendly essentials, such as microchips, solar panels, and batteries that are lacking in the United States. As lawmakers seek “Build America” provisions in multibillion-dollar infrastructure spending bills through Congress, the question of Chinese ownership could arise often.
BYD’s parent company is listed in Hong Kong and Shenzhen. The company says 60% of its shares are held by U.S. investors. Warren Buffett claimed an 8.2% stake https://berkshirehathaway.com/letters/2020ltr.pdf in his latest annual letter.
But after a 2019 congressional report detailed how BYD benefited from investment funds and Chinese state grants to build battery factories as part of the company’s supply chain, it and Chinese railway company CRRC were targeted in an amendment to the National Defense Authorization Act.
Starting in 2022, federal dollars can no longer be used to purchase railroad cars or buses from state-owned or controlled companies, the amendment says.
“China has invested more than $ 10 billion in the electric vehicle battery industry since 2012, which equates to a subsidy of about $ 10,000 per electric car, and more for electric buses,” the report said. .
BYD North America denies the report and says that as a separate business unit it does not receive direct Chinese subsidies, which are instead provided to companies doing business in China.
While Democrats and Republicans agree on little, they have come together on bills targeting China and seeking to limit the country’s economic influence.
Last month, when Democratic Rep. Pete DeFazio, chairman of the House transport committee, visited the house to tout the importance of an infrastructure bill and used some of his time to attack BYD without mentioning them by name.
“We’re going to get two Chinese companies out of here, predatory Chinese companies that make electric buses and railways,” DeFazio said.
BYD PLANS A RESPONSE
BYD and its North American leadership are touting his pro-union status as it prepares to fight to be excluded from the amendment.
He hired a leading lobbying firm, Capital Counsel, with close ties to Democrats and Biden to help convince lawmakers and the White House to make changes to the 2019 law, according to federal lobbying records. .
Robert Diamond, who led Biden’s presidential campaign in New York City, and Lyndon Boozer, who has a close relationship with House Democrats, work for BYD, according to the records. The company was paid $ 50,000 in the first quarter.
BYD also hired law firm O’Melveny & Myers to address concerns of lawmakers and write a report claiming that this is not the type of Chinese public entity envisioned by the 2019 law.
“There’s all this talk of job theft in China, but (BYD) creates jobs, they provide careers for people. People have successful lives, some are buying houses now, the whole community has benefited. “said Willy Solorzano, organizer of the local union of sheet metal workers. The average unionized BYD worker earns $ 20 an hour, he noted.
Some local transportation companies say leaving out BYD doesn’t help them.
“This pulls the most competitive supplier out of the market, creating a collusive environment for other remaining players to raise the price,” said Macy Neshati, CEO of Antelope Valley Transit Authority, which serves the Los Angeles County area. and converted almost its entire bus fleet of around 85 buses to battery-powered BYDs.