A double-decker electric bus on display at BYD’s factory in Lancaster, California, on Oct. 6, 2017.
BYD, the electric vehicle maker backed by Warren Buffett’s Berkshire Hathaway, may be recalibrating plans to expand sales of California-built battery buses to U.S. transit agencies as bipartisan legislation heading to the White House excludes China-based suppliers from federal transportation funds–even if their vehicles are made at U.S. factories.
A version of the National Defense Authorization Act reconciling differences in Senate and House bills was approved this week with a clause specifically barring buses and rail cars from units of Chinese companies from funds available to transit agencies goes into effect in two years. Existing supply deals can continue but new contracts awarded between now and 2021 won’t be grandfathered in. The Trump Administration has signaled it will sign the bill.
Backers of the funding ban have raised concerns that Chinese-affiliated companies pose cybersecurity risks, using cameras, sensors and GPS-enabled devices in transit vehicles to monitor, spy on or even sabotage U.S. infrastructure.
“The inclusion of my provision is a win for American companies, workers and our national security,” says U.S. Representative Harley Rouda, a Democrat from Orange County, California, who authored the House bill. “Some Chinese companies misrepresent themselves as benevolent actors, but let’s be clear: this is an attack on our economy and a potential threat to our national security.”
BYD says the move was “crafted by special interests” and its competitors. “This unfortunate decision rewards a special interest misinformation campaign to squash competition in the electric bus sector and could weaken American competitiveness, threaten hundreds of union jobs and undercut our country’s fight against climate change,” the company said on its website.
BYD, with about 800 union workers building electric buses, trucks and forklifts at a factory in Lancaster, California, north of Los Angeles, will be hit by the new rules, as will Chinese rail car maker CRRC, which is setting up an L.A.-area factory to supply the county transit agency, in addition to production sites already operating in Chicago and suburban Boston.
Led by billionaire Wang Chuanfu the company has spent years building up its zero-emission bus business and just last month secured its biggest-ever U.S. order of 130 buses from the Los Angeles Department of Transportation. L.A. Metro, the country transit agency, inked a deal to buy 95 BYDs in July 2017 to help meet a goal creating an all-electric bus fleet by 2030. The company, short for Build Your Dreams, also supplies Silicon Valley tech firms, airports and universities, and such sales aren’t affected by the defense bill.
Billionaire Wang Chuanfu, BYD chairman and cofounder, third from right, with U.S. Representative … [+]
While China already has hundreds of thousands of electric buses in operation, the U.S. market is still relatively small, with a only a few hundred in operation currently, according to a BNEF estimate, but the market is expanding quickly.
The restrictions could benefit rival Proterra, a leading U.S. electric bus maker that’s vied with BYD for transit agency contracts in recent years, along with long-time transit suppliers New Flyer and Gillig, which also offer battery-powered variants of their diesel and natural gas buses.
Proterra, based in Silicon Valley and led by former Tesla finance team member Ryan Popple, also builds electric transit buses in suburban Los Angeles, as well as Greenville, South Carolina, and boasts the longest-range transit models available in the U.S. Along with Popple, Proterra’s battery tech and production chiefs are also Tesla veterans, and the company has raised about $600 million, including a $155 million funding round led by Germany’s Daimler.
A Proterra 35-foot Catalyst electric bus.
