BYD faces labor abuse allegations in Brazil factory scandal

Chinese workers at BYD’s Brazil site report harsh conditions and withheld wages.

A view of the construction site for BYD's electric vehicle factory at the Industrial Complex in Camacari, Bahia, Brazil, on January 9, 2025. Photo by Joa Souza/Reuters

By Alana Salsabila and Nada Fadiyah

BYD, the Chinese electric vehicle giant, is facing allegations of labor exploitation in its new factory in northeast Brazil, where workers from China report harsh conditions, withheld wages, and passport confiscation. The revelations have led to growing scrutiny over the company’s practices, just as it ramps up its presence in South America’s largest economy.

The controversy erupted after Brazilian labor inspectors found 163 Chinese workers in conditions described as "slavery-like" at the construction site of BYD’s factory in Camaçari, Bahia. The workers, hired by BYD contractor Jinjiang, were reportedly subjected to exploitative labor terms that violated both Brazilian and Chinese labor laws.

Chinese workers trapped in exploitative contracts

Documents reviewed by Brazilian authorities and Reuters show that workers were required to hand over their passports to their employer, receive most of their wages directly in China, and pay an $900 deposit—refundable only after six months of work. The contract also allowed the company to extend their employment period unilaterally and imposed financial penalties for minor infractions, such as swearing or walking shirtless.

"These clauses are textbook red flags of forced labor," said Aaron Halegua, a lawyer specializing in labor rights at New York University Law School. He pointed out that withholding passports and demanding security payments are prohibited under Chinese labor laws.

Despite these allegations, Jinjiang has denied any wrongdoing. The contractor, which has worked on multiple BYD factory projects in China, said the accusations were based on mistranslations and misinterpretations of labor terms. "The claim that Jinjiang's employees were 'enslaved' and 'rescued' is totally off base," the company stated.

BYD distances itself from the controversy

BYD executives in Brazil, including senior vice president Alexandre Baldy, said the company was unaware of any labor violations until Brazilian media first reported the issue in late November. He emphasized that BYD had terminated its contract with Jinjiang after the December labor inspection raid.

Baldy and BYD Brasil President Tyler Li reportedly met with Brazilian President Luiz Inácio Lula da Silva on December 2 to discuss the situation. However, Lula’s office has not commented on the matter. BYD denies that the topic was discussed during the meeting.

The Brazilian authorities’ December raid revealed alarming conditions at the workers' accommodations. Inspectors found employees crammed into overcrowded lodgings with inadequate facilities. In one instance, 31 workers were found sharing a single house with just one bathroom, while food was left piled on the floor amid their belongings.

Brazil’s labor enforcement agency has not provided direct evidence that BYD knew about the labor violations, but officials argue the automaker remains responsible for its contractor’s actions. "BYD is directly responsible because they hired Jinjiang," said Matheus Viana, acting chief of Brazil's Division of Inspection for the Eradication of Slave Labor.

BYD’s Brazil expansion faces setbacks

The scandal has cast a shadow over BYD’s ambitious plans in Brazil, where the company had promised to bring thousands of jobs to Bahia. In 2023, BYD took over a former Ford plant in Camaçari, committing to a large-scale investment in electric vehicle production. The plant was seen as a symbol of growing China-Brazil economic ties and a major win for Lula, who had promoted the deal as a boost for local manufacturing jobs.

Ford had shuttered the factory in 2021, eliminating 5,000 jobs. BYD’s arrival initially sparked optimism, with promises to generate up to 20,000 new positions. However, the decision to bring in a Chinese contractor instead of prioritizing Brazilian labor quickly raised concerns among local labor unions.

Antonio Ubirajara Santos Souza, coordinator of the local construction workers’ union (Sindticcc), said the hiring of Jinjiang showed that BYD "didn't play fair." The union has since announced legal action against both BYD and Jinjiang over the labor violations.

Chinese construction workers arrive at their accommodation after working at the construction site for BYD's electric vehicle factory at the Industrial Complex in Camacari, Bahia, Brazil, on January 2, 2025. Photo by Joa Souza/Reuters

The labor violations have also raised broader concerns about Chinese-led infrastructure projects in Bahia. Local politicians are questioning whether other major Chinese investments, such as a planned $1.28 billion bridge in Salvador, might also rely heavily on imported labor under questionable conditions.

"We can never bring development to our state at the cost of slave labor," said Bahia state congressman Alan Sanches.

Meanwhile, Bahia Governor Jerônimo Rodrigues is balancing concerns over labor abuses with the economic benefits of BYD’s presence. "BYD is expected to create 10,000 local jobs, and we cannot lose that opportunity," Rodrigues told Reuters. However, he insisted the company must provide decent working conditions.

Growing tensions over job opportunities

Brazilian labor leaders are also concerned that local workers may be sidelined in favor of imported Chinese labor. Julio Bonfim, head of the metalworkers’ union in Camaçari, warned that BYD could face protests if local hiring does not meet expectations.

"If we see Brazilians losing jobs to imported workers, the factory will face its first strike under BYD before production even begins," Bonfim said.

BYD has since taken steps to improve conditions, sharing photos of upgraded lodgings and cafeteria facilities. However, labor unions and Brazilian authorities remain skeptical, with investigations into the company’s labor practices still ongoing.

In the coming months, BYD will need to navigate legal battles, government scrutiny, and growing labor unrest if it hopes to move forward with its ambitious Brazil expansion plans. While the company remains a key player in the electric vehicle industry, the unfolding labor scandal threatens to tarnish its reputation in one of its most important international markets.