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One day after BYD (BYDDY-1.47%) overtook Tesla’s (TSLA-3.33%) market share in Europe, the Chinese EV maker and two of its contractors were sued by the Brazilian government for subjecting 220 Chinese workers in the South American country to “slavery-like conditions.”
The construction site of a new BYD factory in Camacari, in the northeastern Brazilian state of Bahia, was set to open in March 2025, but was shut down by the government there in December 2024, citing “degrading” conditions. Those conditions included armed surveillance, beds without mattresses, one toilet for 31 workers, unrefrigerated food, workers’ passports and salaries being withheld, and exhaustive work without rest.
Under Brazilian law, the definition of slavery includes debt bondage and conditions that violate workers’ dignity. BYD and the two contractors are being sued for $45.5 million.
The Chinese citizens entered the country “irregularly,” says Brazil’s labour ministry, “with a work visa for specialized services that did not correspond to the activities actually developed in the work.”
Brazil is BYD’s largest overseas market. BYD, which stands for “Build Your Dreams,” opened a São Paulo factory in 2015 where it builds chassis for electric buses. The Camacari plant was to be BYD’s first full-fledged EV plant outside of Asia.
Fabio Leal, a deputy labor prosecutor, told Reuters in December that the ministry had been in talks with BYD and the two contractors after the plant was shut down, but that no agreement could be found.
That month, BYD claimed that reports of poor conditions were intended to smear China and Chinese brands, and that calling their employees “enslaved” insulted their dignity.