Delay In Delivering Coronavirus Masks To California Leads To $247M Refund From Chinese Manufacturer

A delay in the delivery of an order comprised of millions of N95 and surgical masks means California will receive a $247-million refund from a Chinese manufacturer.

500M Masks Ordered 

The masks, made in China by electric vehicle manufacturer BYD Co Ltd BYDDY, were to have been delivered by the April 30 certification deadline set by the National Institute for Occupation Safety and Health, a spokesperson for the Office of Emergency Services told MarketWatch Wednesday.

The contract for the delivery of 500 million masks over two-and-a-half months was signed in April and valued at nearly $1 billion.

Half of the contract’s value was paid upfront to Global Healthcare Products Solutions, a subsidiary of BYD, a month ago, according to MarketWatch. This advance payment covered 300 million N95 masks valued at $3.30 each.

Why It Matters

No reasons for certification delay have been cited by the office of the governor. An amendment signed Wednesday gives the Chinese firm until May 31 to meet certification or return the other half of California’s upfront payment, the report said.

Tests carried out by NIOSH have found that 60% of 67 types of imported masks failed to meet U.S. standards.

BYD has also partnered with Softbank Group Corp SFTBY to supply 300 million masks per month to Japan.

China recently nationalized the manufacturing of N-95 masks, which triggered shortages in the United States.

The U.S. demand for masks has escalated to 50 billion pieces, which domestic manufacturers such as 3M Co. MMM are unable to fulfill.

Photo by Siyujw via Wikimedia.