Long Beach Transit Board Votes to Buy Electric Buses From Chinese Company

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BYD Motors President Stella Li addresses the Long Beach Transit Board of Directors during public comment at City Council chambers. Photo by Sarah Bennett.

Long Beach Transit's first 10 electric buses will be from Chinese-owned company BYD Motors, it was decided Monday. LBT's Board of Directors approved the staff-recommended company for the $12.1 million bid after nearly two hours of public comment and discussion amongst board members in which several alternative motions were put forth including options to delay voting and scrap the RFP altogether.

Eventually, it was the added stipulation of a $14 million performance bond from BYD that pushed the motion to a vote.

The decision to award BYD Motors--an L.A.-based subsidiary of a Chinese battery and green tech company--the contract for LBT's pilot Electric Bus Project was no easy one. In the month since voting was deferred, the Board hosted two hours-long study sessions to review information about the company. During those meetings, staff addressed criticisms that BYD falsified claims about its current U.S. clients and answered questions about whether or not BYD will meet the Buy America clause of the Department of Transportation's Transit Investments for Greenhouse Gas and Energy Reduction (TIGGER) grant, which was awarded to LBT two years ago.

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Despite stating on its original proposal that it had sold buses to Apple and Hertz, BYD currently has no buses sold or in revenue operation stateside, no manufacturing capabilities in the U.S. and has not tested any of its e-buses at the Altoona Bus Research and Testing Center--the Federal Transportation Authority's rigorous and required bus testing system.

But transit officials say the company received the recommendation on the basis of not just its reputation as a global battery and technology provider, but also it's plans to open two production facilities in Lancaster by early 2014 and have Chinese-made buses to Altoona by next month. A pre-Buy America audit conducted by a third party hired by LBT concluded the buses the firm plans to build in the U.S. will be 71% American-made.

"If there's one thing I've learned from working with BYD, it's that they are very honest and they do exactly what they say they will do," said Mark Bozigian, Lancaster's City Manager, during public comment prior to the vote. "This is something more than purchasing 10 buses. You have the chance to start a growth industry here. Yes, it's in Lancaster, but we are a regional economy and I urge you to seize this opportunity for California."

Bozigian said that permitting for BYD's two Lancaster production plants--one for making the batteries and one for making frames and assembling the buses--is complete and because the location used to house an RV manufacturer, the infrastructure for bus-making is already present. BYD officials also say that they already have 300 trained ex-employees of the RV plant ready to work and hope to begin producing their American-made electric buses there by the beginning of next year. A Chinese-built model constructed according to American specifications is currently on its way to Altoona.

To ensure that all of the stipulations are met by the deadline, the Board made a last minute addition to the motion for approval of the contract: a $14 million performance insurance policy that must be taken out by BYD. If the company does not deliver 10 Altoona-tested, Buy American-compliant buses by June 2014, they will owe back the total of their contract.

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LBT purchased 10 of these BYD electric buses.

"The bus delivery is not an issue," said Brendan Riley, Vice President of Fleet Sales for BYD Motors. "But there's always a possibility [of a delay] with Altoona...These buses are built to American standards and we have built a track in China to simulate--to the best of our abilities--the Altoona track."

Though the board eventually voted to approve a contract with BYD, the decision was not without criticism both from dissenting Board members and members of the public. Some objected on grounds that BYD was an unproven company in North America; others were upset that the Board was considering a foreign firm.

"The decision before you isn't about who is the nicest company," said Kevin Smith of Solar Reserve, who spoke during public comment. "These are bigger issues on a national scale. You're talking about giving federal funding to further Chinese technology...and putting money into something that is not in the best interest of the U.S."

Several substitute motions were brought before the board including one to rescind the entire RFP and another to enter negotiations with the staff's second-choice company, South Carolina-based Proterra, citing their electric buses that are already in U.S. production and have been Altoona tested since early last year. Both substitute motions failed.

"I want electric buses. I want to go down that path, but I'm okay with us not being the first," said boardmember Lori Ann Farrell. "I have concerns about authorizing a contract wth a company that does not have an Altoona-tested bus. We can't be chasing ghosts and putting our carts before the horse."

"I disagree," said boardmember Freda Otto. "I think now is the time to step forward and be a leader in electric buses. Long Beach should be honored for the opportunity to host such an amazing project."

The Board voted 5 to 2 to approve the contract.

BYD executives said the company should have a sample bus in Long Beach as early as January 2014. Transit officials say they intend to use the buses initially on Downtown's Passport line because of its short route and built-in 10-minute layover at the Queen Mary, where charging stations could be installed.

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