BYD to Reapply for U.S. Approval for N95 Masks

What’s new: BYD Co. Ltd. said it will reapply for U.S. regulatory approval for its new N95 masks — and hopes to obtain certification by late May or early June — after federal authorities rejected the electric car giant’s previous application.

BYD, which pivoted to mask-making after the coronavirus hit, needs to obtain certification from the U.S. National Institute for Occupational Safety and Health (NIOSH) by May 31, or it will be forced to pay back the second half of a nearly $500 million down payment from the U.S. state of California that it received as part of a mask supply deal.

Background: BYD signed a $1 billion sales contract with California on April 7 for 300 million N95 masks and 100 million surgical masks. The surgical masks were delivered, but when the company failed to obtain certification from the NIOSH for its N95 respirators by an April 30 deadline, it was forced to refund half of the advance payment for those items — or $247 million — to the California government.

A second deadline now looms.

NIOSH said it knocked back the approval based on a “number of factors” but would not elaborate, citing confidentiality. It would only disclose that BYD’s factories in Shenzhen and Changsha had failed onsite inspections — which were carried out by a contractor due to travel restrictions — and that paperwork BYD provided on the design, manufacturing and quality inspection of the N95 masks was “concerning.”

“BYD has the opportunity to address the deficiencies and re-submit for NIOSH approval,” the regulator said in a statement to Caixin, adding it would expedite review if there was evidence the issues were resolved. “The time needed to achieve the approval is controlled by BYD’s ability to identify and implement corrective actions.”

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Related: As Its New Energy Car Sales Slump, BYD Finds Profits in Face Masks

Contact reporter Flynn Murphy (flynnmurphy@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)