BYD’s First Canadian Manufacturing Venture Fails to Deliver Results

In an attempt to establish a foothold in North America, BYD’s first Canadian manufacturing facility faced significant challenges, ultimately leading to its closure. This Shenzhen-based electric vehicle manufacturer had high hopes when it launched its electric bus assembly plant in Newmarket, Ontario, in 2019.

BYD’s Manufacturing Journey in Canada

BYD, the world’s largest electric vehicle maker, opened a 45,000-square-foot factory aimed at producing electric buses. The facility’s initial project, designed to deliver ten buses for the Toronto Transit Commission (TTC), marked a promising start, but that would become the limit of the plant’s output.

Challenges and Closure

After a few years of operation, quality issues and strained political relations between Canada and China thwarted BYD’s efforts. The Newmarket plant was BYD’s second in North America, following a facility in California. However, the lack of support and supply chain integration became apparent.

• BYD’s Newmarket facility closed after completing just one project.
• The BYD name has since been removed from the building, which was sold.
• The North American operations rebranded as RIDE in 2022.

Operational Difficulties

Reports from the TTC highlighted several operational difficulties with the BYD buses. These included:

• Significant delays in obtaining replacement parts, taking up to 73 days for a single rear axle.
• Poor quality of repair manuals and a lack of diagnostic tools in English.
• Insufficient engineering support from BYD during operations.

These issues were echoed by other municipalities. For instance, St. Albert, Alberta, acquired seven BYD buses, and within five years, three required full battery replacements. Furthermore, all seven buses needed replacement components, causing extended downtimes of up to 80 days per replacement.

Investment Challenges and Changing Regulations

The pandemic and the deteriorating diplomatic relations between Canada and China further complicated BYD’s operations. A 2021 report revealed that BYD Canada had received $24.6 million for supplying personal protective equipment during the COVID-19 crisis.

Recent changes in Canadian policy now allow for more Chinese electric vehicles to enter the market. Potential tariffs will be reduced, allowing 49,000 Chinese EVs to be imported annually. However, BYD’s future in Canada remains uncertain, as it would require a significant investment to establish a viable service network.

Future Outlook

While BYD may eventually consider investing in auto production in Canada, the challenges are substantial. The company must assess whether a potential market share justifies the investment. As for now, competitors like Chery Automobile Co. Ltd. are positioning themselves to capture the growing EV market in Canada.