After Setbacks, Electric-Car Maker BYD Given Green Light to Export N95 Masks to California

U.S. officials have approved N95 respirators made by Chinese electric-vehicle manufacturer BYD Co. Ltd., clearing the way for the firm to ship 150 million masks to California as part of a $1 billion deal.

California Governor Gavin Newsom said BYD’s first shipment of masks is expected to arrive in the coming days, and will be handed to frontline health workers to help stop them catching Covid-19.

“This new supply of N95 masks, as well as the surgical masks this contract has already provided, are game-changing and play a crucial role in our state’s public safety and reopening strategy,” Newsom said in a statement Monday.

The 150 million masks represent half of California’s original order of N95 masks, for which the state paid $495 million upfront. BYD pledged its masks would get regulatory approval from the U.S. National Institute for Occupational Safety and Health (NIOSH) as part of the deal.

But when BYD was unable to get regulatory approval before the April 30 deadline laid out in the contract, the company was forced to refund half of the downpayment to the U.S. state.

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

The NIOSH said in a statement to Caixin at the time that BYD could address the deficiencies and reapply for approval, adding that it would expedite review if there was evidence the issues were fixed.

Last week California amended its contract with BYD to again push the deadline back, this time to June 12, after the carmaker failed to meet a second deadline for NIOSH approval on May 31.

“The contract will ensure that the state has a sufficient supply of masks going forward should there be need for them in the future,” Newsom said.

With more than 133,000 diagnosed, California has the third-most known coronavirus cases of any U.S. state, according to figures from Johns Hopkins University. More than 4,600 people in the state are known to have died of Covid-19.

California previously agreed to buy 100 million surgical masks from BYD for $54.9 million, and those have already been delivered, according to the Los Angeles Times.

BYD is just one of many companies around the world that shifted production to medical gear after coronavirus outbreaks created demand for the goods and cratered consumption of other products, with mixed success. Others included Milan-based luxury carmaker Ferrari and French luxury goods producer LVMH Moët Hennessy-Louis Vuitton SE.

Cai Qi contributed reporting.

Contact reporter Flynn Murphy (flynnmurphy@caixin.com) and editor Joshua Dummer (joshuadmmer@caixin.com)