Brazil closes BYD factory due to “slavery” conditions

Brazilian authorities halted construction of a factory for Chinese electric vehicle (EV) giant BYD, saying workers were living in conditions comparable to “slavery.”

More than 160 workers have been rescued in the state of Bahia, in northeastern Brazil, according to a statement from the Public Labor Prosecutor’s Office (MPT).

They were allegedly placed in a “degrading” environment and had their passports and salaries withheld by a construction company.

BYD said in a statement that it had cut ties with the company involved and remained committed to “full compliance with Brazilian legislation.”

The factory was scheduled to be operational in March 2025 and would be BYD’s first electric vehicle plant outside Asia.

The workers, hired by Jinjiang Construction Brazil, lived in four facilities in the city of Camaçari.

According to prosecutors, at one of those facilities, workers were forced to sleep on beds without mattresses.

Each bathroom was also shared between 31 workers, forcing them to get up very early to be ready for work.

“The conditions found in the accommodation reveal an alarming picture of precariousness and degradation,” said the MPT.

“Slavery-like conditions,” as defined by Brazilian law, include debt bondage and work that violates human dignity.

The MPT added that the situation also constitutes “forced labor”, as many workers had their wages withheld and faced excessive costs for terminating their contracts.

BYD said the affected workers had been moved to hotels.

It added that it had carried out a “detailed review” of the living and working conditions of subcontracted employees and asked the construction company on “several occasions” to make improvements.

BYD, short for Build Your Dreams, is one of the largest electric vehicle manufacturers in the world.

It sold more electric vehicles than Elon Musk’s Tesla in the last three months of 2023, as the two fought for first place in the sector.

The company has also been expanding its presence in Brazil, which is by far its largest foreign market.

It first opened a factory in São Paulo in 2015, producing chassis for electric buses.

Last year, it announced it would invest 3 billion reais ($484.2 million) in Brazil to build an electric vehicle manufacturing plant.

Electric vehicle sales in China have been boosted by government subsidies. that encourage consumers to switch from gasoline cars to electric or hybrid vehicles.

But there is a growing backlash abroad against what some see as the Chinese government’s unfair support of domestic automakers.

Major markets such as the United States and the EU have imposed tariffs on electric vehicles from China, and more tariffs are expected under the incoming administration of US President-elect Donald Trump.