Brazil Halts BYD Factory Construction Over ‘Slavery’ Conditions
Brazilian authorities have suspended the construction of a new electric vehicle (EV) factory for Chinese automaker BYD in the northeastern state of Bahia. The decision follows allegations that workers were subjected to conditions described as "slavery-like" under Brazilian law.
The halted project, initially scheduled to be operational by March 2025, was set to become BYD's first EV manufacturing facility outside Asia, marking a significant step in the company’s global expansion plans.
Workers Rescued from Degrading Conditions
More than 160 workers were rescued by the Public Labour Prosecutor’s Office (MPT) from facilities in the city of Camaçari, where they were living in dire circumstances.
At one lodging, workers were forced to sleep on beds without mattresses, while others had to share a single bathroom among 31 people. Prosecutors described the living conditions as “alarming” and degrading, adding that many workers had their wages withheld and faced excessive penalties for terminating their contracts.
Under Brazilian law, slavery-like conditions include forced labor, debt bondage, and situations that violate human dignity.
BYD Responds to Allegations
BYD, one of the world’s largest EV manufacturers, said in a statement that it had severed ties with the construction firm responsible, Jinjiang Construction Brazil. The company emphasized its commitment to complying with Brazilian labor laws.
"Affected workers have been moved to hotels, and a detailed review of working and living conditions for subcontracted employees has been conducted," BYD said. It also noted that it had repeatedly urged the contractor to improve conditions prior to the intervention.
Global Expansion Meets Local Challenges
The factory in Bahia was part of BYD’s $484.2 million investment in Brazil, its largest overseas market. The company already operates a factory in São Paulo, producing electric bus chassis since 2015.
This expansion effort reflects BYD’s ambition to dominate the global EV market. The automaker surpassed Tesla in EV sales during the last quarter of 2023, becoming the largest EV manufacturer worldwide.
Backlash Against Chinese EV Makers
While BYD has benefited from government subsidies in China, helping it compete globally, its overseas expansion has not been without controversy. Major markets like the US and EU have imposed tariffs on Chinese EV imports, citing concerns over unfair government support for domestic manufacturers.
The labor violations in Brazil could further complicate BYD's reputation as it faces increasing scrutiny abroad.
Implications for Brazil and the Global EV Market
This incident highlights ongoing labor rights challenges within global supply chains, particularly in rapidly expanding industries like electric vehicles. For Brazil, the situation underscores the need for stronger enforcement of labor laws as it seeks to attract international investment.
As BYD navigates this crisis, its ability to maintain its position as a global leader in the EV market will likely depend on its adherence to international labor and ethical standards.