Federal Government May Block BYD Deal In Long Beach
Chinese-owned BYD has had a rough time trying to get its EV buses on American roads. In just one year, the company faced political backlash and testing problems and delays. And now a new speed bump: the FTA may block Long Beach Transit’s plan to buy ten EV buses from BYD.
At issue: BYD’s compliance with the federal government’s Disadvantaged Business Enterprise Program, which requires contractors that receive federal money to give socially and economically disadvantaged businesses a chance at the work. According to its website, BYD currently complies with the Program and “puts great value on diversity in both its workforce and its vendors.” But at the time of its bid, BYD could not provide documentation showing its compliance.
The Press-Telegram discovered letters from the FTA to Long Beach Transit, warning the agency that BYD was ineligible to receive federal funding when the Transit board members approved its contract in March 2013.
“FTA has determined that BYD was simply ineligible to bid on the LBT procurement because its February 12 and March 27, 2013 certifications were false,” reads a December 16 letter signed by Linda Ford, the FTA’s civil rights office director and Dorval R. Carter Jr., who is the agency’s chief counsel.
Long Beach Transit has not commented on the FTA letters, but an agency statement said it would give BYD time to resolve the issue. Unfortunately, a resolution doesn’t seem possible. The FTA has made it’s position clear: Long Beach Transit must either cancel the contract with BYD and start the bidding process over, or lose the federal grant.
If Long Beach Transit really wants EV buses on the road — which would greatly improve air quality in the city — it needs federal funding. This puts BYD in a tough spot (again) and the company seems ready to fight (again).
“BYD is performing under the LBT contract and there is no need to re-bid,” vice president Michael Austin wrote in an email.
It will be interesting to see how this plays out. The deal between BYD and Long Beach Transit has stayed in place even after the company was fined $100,000 for alleged violations of California’s minimum wage laws and cracks were discovered on some of the buses’ frames during testing. But with FTA taking such a strong stance, this may be the last straw.
And all these problems aren’t very helpful for BYD as other American cities consider adding EV buses to their fleets. This can only be good news for its primary competitor, Proterra.