Hogan Lovells US LLP

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October 9, 2018

BY ELECTRONIC FILING PUBLIC DOCUMENT

Mr. Arthur Tsao

Assistant General Counsel

Office of the United States Trade Representative

600 17th Street, N.W.

Washington, DC 20508

Re: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual 

Property, and Innovation, Docket Number USTR-2018-0025: Exclusion Request of 

BYD USA Regarding Q3M Electric Trucks 

Dear Mr. Tsao:

On behalf of BYD Motors, Inc. (“BYD”), an American manufacturer of electric battery 

powered mobility products including electric coaches, busses, and trucks, we respectfully 

submit this exclusion request pursuant to the publication by the Office of the United States 

Trade Representative (“USTR”) of Procedures to Consider Requests for Exclusion of Particular 

Products from the Determination of Action Pursuant to Section 301: China’s Acts, Policies, and 

Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 

32,181 (July 11, 2018) (the “Exclusion Procedures”). For the reasons set forth below, a 25 

percent tariff on Q3M electric trucks would harm the competitiveness of our U.S. manufacturing 

business, harm related component manufacturers in the United States, and increase noise and 

air pollution in U.S. cities. Simply put, these tariffs will put significant quantities of well-paying 

U.S. manufacturing jobs at risk while hurting electric mobility solutions adoption in the United 

States. Accordingly, USTR should grant an exclusion from the Section 301 tariffs for this 

product as described below.
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I. Introduction

BYD began as a start-up in 1995 and has grown into a global leader in electric products. 

We are not owned, controlled or directed by any foreign government. Our largest public 

shareholder is Warren Buffet’s firm, Berkshire Hathaway, based in Omaha, Nebraska. While 

BYD Motors, Inc.’s parent company is based in China, BYD is a U.S. manufacturing success 

story. BYD opened its U.S. headquarters in Los Angeles in 2011. Three years later, BYD 

opened its first U.S. electric mobility manufacturing plant in Lancaster, California. BYD then 

created a separate unit, BYD Energy, in Lancaster to manufacture electric transportation 

solution battery packs and battery modules. BYD Energy supplies all of the electric battery 

modules for BYD’s state-of-the-art, 550,000 sq. ft. electric bus manufacturing facility located 

nearby. BYD’s electric busses have the safest bus battery in the U.S. market and the first to

have a 12-year warranty. 

BYD has scaled up quickly during the past four years and continues to grow U.S. 

manufacturing. BYD currently employs over 1,000 people in its U.S. operations and BYD plans 

to grow its workforce to approximately 1,200 as it expands its current facility to encompass 

increased manufacturing. BYD recently announced that it completed a new $5 million 100,000-

square-foot warehouse for its Lancaster manufacturing plant. 1/ This is the firm’s fourth 

expansion of its current manufacturing campus in Los Angeles County, bringing its total 

investment in Lancaster facilities to more than $53 million. According to the city of Lancaster, 

BYD’s presence has led to more than 3,000 additional jobs in the region. BYD’s total 

investment in U.S. manufacturing over the last seven years, through facilities, American workers, 

and partnerships with U.S. vendors, exceeds $250 million. BYD is also forecasted to spend $50 

million in 2018 on components made by American vendors across the nation.

BYD is proud that our manufacturing workers are members of SMART, the International 

 

1/ BYD Continues U.S. Investment with New $5M Warehouse Facility, Mass Transit, September 26, 

2018, available at https://www.masstransitmag.com/press_release/12431527/byd-continues-usinvestment-with-new-5-million-warehouse-facility.
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Association of Sheet Metal, Air, Rail and Transportation Workers, Local 105 (“Local 105”), a 

labor union representing sheet metal, air, rail, and transportation workers. BYD and Local 105 

recently signed an agreement in January increasing wages and implementing enhanced training 

opportunities. Commentators have declared that “[t]here is no [other] company that has a 

contract like this in the industry.” 2/

BYD invests in its community. Through an agreement with Local 105, BYD has 

committed to work toward the goal of recruiting and hiring 40 percent of our workers from 

populations facing significant barriers to employment, such as veterans. BYD has also initiated 

an effort to recruit workers from other populations that have been historically underrepresented 

in the manufacturing industry, including women and African Americans. BYD’s workforce is 

diverse with over 85% minority workers. BYD has sponsored an endowment at nearby Antelope 

Valley College to train students for manufacturing jobs in the technology sector. BYD and Local 

105 have also worked in partnership with the college to create a state-of-the-art green hightechnology manufacturing training program. The program will not only help BYD develop the 

next generation of green high-technology manufacturing workers for a career at our 

manufacturing facilities, but also enhance the region’s economic development opportunities by 

creating an elite pool of highly-skilled advanced green manufacturing workers. Congressman 

Steven Knight, among many others, has applauded BYD’s investments: “BYD is a company that 

has brought good-paying manufacturing jobs back to California while other companies are 

choosing to export those jobs to other states and countries. . . . We need more companies like 

BYD in California that are training and building up a workforce of skilled individuals that are 

prepared for the manufacturing jobs of the future.” 3/

 

2/ SMART Local Union 105, BYD Workers Ratify Unprecedented Contract (Feb. 7, 2018), available 

at: http://local105.org/2018/02/07/byd-workers-ratify-unprecedented-contract (Exhibit 1).

3/ Charged Electrical Vehicles Magazine, BYD expands California electric bus factory, Charged (Oct. 

17, 2017), available at https://chargedevs.com/newswire/byd-expands-california-electric-bus-factory 

(Exhibit 2); Ross Naksone, Electric Buses = More Good, Union Jobs for Low-Income Californians, Blue 
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BYD is an example of a U.S. company developing its technology at home in the United 

States, rather than abroad. There is no forced technology transfer or stealing of intellectual 

property in China – rather, we are importing Chinese technology and benefitting from it here in 

the United States as we build upon that technology to improve the product. Imposing tariffs on 

BYD would be doing the opposite of the goals of the Section 301 investigation.

II. Tariffs will Harm U.S. Businesses and the Health of U.S. Communities

Tariffs on these products will harm U.S. manufacturing – both at BYD Motors, Inc., as 

well as at its customers. In some instances we up-fit the imported product with components and 

hardware in Lancaster, including for example suspension, brakes, steering, seats, video 

surveillance equipment, fabrication, and other features preferred by the customer. BYD’s truck 

business includes over 40 American workers dedicated to R&D, Homologation, Engineering, 

Project Management, Logistics, Parts, Service, and Support. In other instances, the up-fitting is 

done by third party suppliers located around the United States. For example, truck compactor 

bodies are manufactured and installed in Scranton, Iowa, and other trucks are being built in 

Ontario, California. It is common for approximately 30% of the final product’s value to come 

from United States manufacturing. 

BYD plans to increase U.S. manufacturing capacity for this product so that we can build 

more units in the United States. If we can continue to import from China and build market 

demand in the United States, we can fulfill our goal of expanding U.S. manufacturing jobs 

related to this product by the hundreds.

More broadly, our products differ from other imported items in that they use a lithium 

iron-phosphate battery. These products are better for health and safety, and are superior to our 

competitors’ batteries. They are the longest lasting batteries on the market, are fully recyclable, 

 

Green Alliance (Aug. 1, 2017), available at https://www.bluegreenalliance.org/resources/electric-busesmore-good-union-jobs-for-low-income-californians (Exhibit 3).
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and have no toxic chemicals. 

III. The Product is Only Available from China

BYD understands that these electric products using an iron-phosphate battery are only 

available in commercial quantities from China.

IV. The 10 Digit Subheading of the HTSUS Applicable to the Product 

Requested for Exclusion

The 10 digit subheading of the HTSUS applicable to the product at issue here is 

8704.22.1060.

V. Identification of the Particular Product, Physical Description of the Product, 

and Ability of CBP to Administer the Exclusion

BYD proposes that this product, with a length of 278.3 in., width of 100.4 in., height of 

121.3 in., and wheelbase of 166.3 in., be excluded from the Section 301 tariffs. The product’s 

physical description is set forth below. Additional information is provided at Exhibit 4.
IIX. Quantity and Value of the Product over the Last Three Years 

The quantity and value of imports for 2015-2017 were as follows: 

Quantity Value 

2015 0 0 

2016 0 0 

2017 9 $2,188,000 

************** 

For the reasons explained above, we urge USTR to grant an exemption for the 

aforementioned product from the Section 301 tariffs. Failure to do so would hurt the 

competitiveness health and safety of American workers. 

Respectfully submitted, 

HOGAN LOVELL i US LLP 

Craig -wis 

Jared essel 

Michael Jacobson 

Counsel to BYD Motors, Inc. 
Exhibit 1


Exhibit 2




Exhibit 3


Exhibit 4